Does he or does the company? If they had decent understanding of economics, they should have shut down their Bay Area operations?

Employees aren't interchangeable cogs. It's funny how HN will complain about outsourcing and offshoring as doomed endeavors when they imagine their own jobs going to someone in a lower cost of living location. Any company that fires an expensive employee to replace them with a cheaper employee in a different location is making a huge mistake! Employees aren't interchangeable cogs!

Then as soon as the roles are reversed we're supposed to believe that the people in the more expensive location are easily replaceable. Any company that pays people differently is making a huge mistake! Employees are interchangeable cogs!

Regardless, it's silly to propose that engineers are interchangeable cogs in a machine and you can find perfectly identical talent anywhere. If that was true, companies would ignore all of these locations and skip straight to the cheapest country they could find.

But network effects matter, and hiring out of the Bay Area taps you into a different set of experience and networks than almost anywhere else in the world. I'm not suggesting that every Bay Area engineer is better than every Netherlands engineer, but the Bay Area talent pool really is unique and well connected in a way that's hard to find elsewhere.

Not seeing too many international career opportunities here, sadly.

I'd bet that GitLab, as an entity or corporation, felt mission-driven and empowered by settling not far from GitHub.

Thankfully where I work now (ockam.io) indexes to Bay Area salaries, irrespective of where people are based.

Because as we all know the laws of economics are fair and just. Truly a business man who strictly follows the laws of economics would always compensate people fairly for their value delivered to the company.

In all seriousness, how does this make economic sense? The company is incentivizing that people move to areas with a high cost of living, but why exactly? What economic benefit does that bring to the company?

The only reason that's ever been explained to me is that the cost of competing for talent is higher in those areas than others. However someone's location is a poor indicator for talent potential, so why would you compete in high cost areas?

No it's not? If this were true, then economic hubs wouldn't exist. If someone is talented in field it's likely they will move to an economic hub that has jobs for their talents. If I wanted to open a trading firm I'd likely find the most capable candidates in Chicago, because thats where most of the jobs are today. There are certainly capable hires in Idaho, but how much time should a company spend looking for a needles in haystacks?

You are looking for stability-based economics and wondering why your conclusions don't appear in reality. Well, it's because your economics are wrong.

They pay more there exactly because there is larger competition. And they hire there because that's where their money come from and where they started hiring before going global. If they reseted their hiring choices and had to do all of them again now with the current company, they would be better off hiring at cheaper places and not having anybody on the more expensive ones, of course. But the sheer absurdity of that conditional should be enough reason for you to see it won't happen.

It doesn't always bring an economic benefit to the company, which is why there are debates over companies calling employees back into the offices. That is almost always based on gut feeling and herd-mentality, than on any concrete data.

However, companies have to recruit from labor markets, and as such, they are bound by its vicissitudes. Despite the pandemic scattering many software people all over the country, the vast majority of competent software developers with cutting-edge work experience are still to be found in the Bay Area. Therefore, it makes sense for the company to insist that other hires also live in the Bay Area. Perfectly understandable. If the company is able to compete effectively for talent in the remote market and able to make it work (timezones and cultural differences do matter, even if it were possible to recruit remote workers easily), then it would do it, sooner or later.

Is it? Are you better off if you earn more but live in a high cost of living area? I hear about people working in SF for the big tech companies but living from a car because they can't afford to live there.

1. GitLab (as with most other companies with geo-dependent comp) pays based on Cost of Labor--not Cost of Living. So if a market has crazy-expensive real estate but salaries haven't caught up (somewhere like Vancouver), you're out of luck.

2. GitLab is NOT encouraging team members to relocate to HCOL areas at all. In fact, while they encourage hiring in LCOL areas (there are target "location factors" for teams, so there's a bias toward hiring in lower-cost areas), the Handbook ( https://handbook.gitlab.com/handbook/people-group/relocation... ) states that "Relocations resulting in an increase in compensation must be approved by the team member’s direct manager, and location factor changes that are >.2 will require direct manager, VP as well as an eGroup Member approval."

TL;DR -- don't get hired in Iowa an expect to bounce to SF right away.

Besides, your alternative isn't making more money. It's not getting the job.

Some of those characteristics were given protection in law after enough noise was made.

Of course any adjustment in pay needs to fit budget, so the company and line manager would need to have the budget to afford to. And there's probably plenty of companies that won't have this as an option or won't adjust for inflation, but there's also plenty of examples that do.

If you pay the global median salary to everyone, people in high cost areas are screwed and you’ll never be able to recruit there.

If you pay everyone in your company the highest salary, people in low cost areas live like kings while their peers in high cost areas live a more modest lifestyle.

As a company you’re not out to solve global inequity, you’re out to hire good talent effectively and efficiently. Like leaving a 40% tip at a restaurant, overpaying the going rate on salary doesn’t really get you anything but feel goods at a certain point.

Can I ask which country?

Usually what I see is that remote jobs will offer a slight higher wage than the going rate in lower cost of living areas. That way you’re in a situation where moving to a higher cost of living area and making a more regionally average salary isn’t all that attractive.

> When you do exactly the same job in the same company, same department, same team, with the same output — then definitely it's discrimination.

But that’s my point as well: if you’re in San Francisco paying $5,000 a month in rent for an apartment and your coworker in Cambodia is also getting an SF salary living in a mansion with servants because your company is location blind that’s also a form of inequity.

My point is, people are going to have different lifestyles that cost different amounts and give them different benefits. Companies should fuck off pretending they care about fairness or cost of living. Just call it what it is - competition-based pay. You pay someone in SF more because you are forced to by market conditions, and if you could, you would pay them less, with zero concern for their rent or mortgage. And since you CAN pay someone in Kansas City much less, they do.

We've already seen the prevalence of remote work change the equation. Many places now pay SF 110% and everyone else in the US 100%. The COL difference between SF and KC is not that 10 percentage points. Nor could you compensate someone for the discomforts - both political and meteorological- of having to live in Missouri, who God himself has abandoned.

The guy who doesn’t have kids paid it indirectly in his social contributions. The next guy next to him too. And the next guy. And so on.

It's incredibly hard to budget for children though, you can't really foresee how much they will cost. One child eats little, one eats much, one is picky, one not, one likes soccer, the other one likes lego. Very hard to predict, except maybe year 1-2. But then one might be good with breastfeeding while the other might require formula and the cost of the first one is 0 while the second one could be very high

And I'm not saying it should be more, I was more saying it in jest to help deter comments like "but you get tax kickbacks!". I do think that we should be doing more for children - free school lunches with no means testing, free childcare from birth instead of just when they enter the public school system, and so on - but the child tax credit is the most visible "kickback" so I made a joke about it to acknowledge it.

My point here, more generally, is that companies shouldn't be trying to play this game with "fairness". Just call it what it is - capitalism and the invisible hand of the free markets. If people have problems with how that system allocates capital, then do something about it, but don't try to pretend any of its machinations have any relation to notions of justice or fairness.

(And I say this as someone not overly invested in that world - I have a 17 yo stepdaughter, and I am fortunate that in addition to my excellent healthcare, my company pays 100% of the premiums for my partner and kid, not just me).

It’s kind of like parking. If employees don’t pay for parking then an employer is subsidizing car driving over other options.

Choosing between abandoning your family and maximizing your revenue isn’t exactly an even choice.

Otherwise, see The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen.

https://www.amazon.com/Complacent-Class-Self-Defeating-Quest...

This is rarely about avoiding paying a FAANG engineer $500K and letting them work from Bali. They're weaponised in ways to give a plausible defence to why two people with the same role and experience are paid vastly different amounts for doing the same job.

What’s not to resent?

why wouldn't he come here then? (he could have easily come on L1, great visa, spouse can work too, straight path to GC)

It’s ok for enterprises to pay different prices/salaries in different locations yet individuals don’t get to do the same is a flaw in how we are taught what we can ask for

We are trapped in the matrix , need a red by pill

I mean he lives in Amsterdam, which is more expensive than the rest of the country, sure, but nowhere near what it's like in SF according to https://www.numbeo.com/cost-of-living/rankings.jsp (Amsterdam is ranked 75, vs SF at 8), and I'm not sure if that index includes health care and social benefits like state pension, etc. Speaking of, that's only salary, ìt excludes stocks, bonuses, pension contributions, and other benefits.

Then there's accessibility; living in central Amsterdam means he can fulfill most of his daily needs and transport by bike. Can't get much cheaper than that.

TL;DR, he can move to SF if he wants to earn SF rates.