Equal Pay for Equal Work

https://dusted.codes/equal-pay-for-equal-work

by dustinmoris • 6 years ago

37 72 6 years ago

dessant• 6 years ago

When iPhone prices will be adjusted for cost of living, employers can adjust compensation based on the geographical location of the employee. Just because potato is cheaper in some places, substantial purchases can still cost the same, and sometimes even more, depending on your location.

sourceless• 6 years ago

Yep. Your average SV engineer might be able to afford a Tesla and still have plenty room to spare in their budget, but your average EU-based engineer doing the same job is never going to get anywhere close.

RcouF1uZ4gsC• 6 years ago

But the SV engineer will be parking their Tesla on the street next to their one-bedroom apartment.

oytis• 6 years ago

I guess if companies were to go all-remote, and offer equal pay to anyone, based on the sheer numbers the equalized salary will be closer to that on Bangalore rather than SV. So as a EU resident I wouldn't complain much, there are a lot of people who envy our salaries too.

qsort• 6 years ago

This. This a thousand times. You'd much rather earn 10x and spend 8x than earn 2x and spend x, because at the end of the day you have twice as much money in the bank.

"Cost of living" is a bastardization of the concept of real wages that doesn't even make the slightest economic sense.

laurent92• 6 years ago

Also the opposite: Sydney is a very nice place to live. But very expensive.

Should we boost salaries of people in Sydney so they can sustain living in the sun all year long with rich neighborhoods and a thriving city? And then pay people less in rainy and cold places, just because it’s poorer and disenfranchised and flats are cheap in the polluted area of the city, so your price-per-square-meter is lower? That is why the average cost of living there is lower, after all.

If we pay people at their living cost, people will flock to nice places, overpopulating them while cold places will die faster than Detroit.

There is no right answer to that. So let’s not “organize” it and let the markets decide.

sz4kerto3• 6 years ago

Stuff I really-really dislike when people start talking about 'adjustments because of difference in cost of living'.

Stop that bullshit. Be frank, and say that compensations will be different because the market is different. That's it.

'Cost of living' is bullshit without specifying what 'living' means. That needs you to specify what your employees should be spending their income on. If an Ukrainian employee spends all they income on buying houses and going to restaurants and hairdressers, then their cost of living is really way cheaper than someone living in, say, London and buying similar houses and eating in similar restaurants. However, if our imaginary Ukrainian employee wants to buy cars, gadgets or wants access to high-quality healthcare, then suddenly the cost of living is _higher_ for them than for someone living in London.

So screw the bullshit around 'cost of living'. Do whatever you prefer about compensation, but be straight about it.

(The article is not great, though, e.g. stuff like "Whatever one's situation is, however difficult a negotiation might be, treat people like they were your friends" -- well, no, your colleagues are not your friends; some of them might be, but you better have friends as your direct reports.)

marcus_holmes3• 6 years ago

treat people like they were your friends

that's not saying "these are your friends", it's saying "treat them like they were your friends". They're clearly not your actual friends, but negotiating is easier and gets better outcomes if you're friendly and positive. Starting a negotiation with an unfriendly and hostile or combatative attitude doesn't work as well.

sz4kerto3• 6 years ago

Maybe I'm just nitpicking, in that case I apologize, but:

Treating someone as a friend and being friendly are very different. Sometimes I am very assertive, pushy with my friends, and make them uncomfortable. I'd like to think that I'm doing that when making them uncomfortable is in their interest (e.g. telling someone to stop doing something that's harmful for them is definitely not a 'friendly' thing to do).

In a business setting, being friendly can simply be means to squeezing more value out of a person.

Therefore I'd be careful with my words here: if TFA wants to say 'friendly' then that is what it should do instead of saying that "treat people like they were your friends".

crdrost• 6 years ago

This is the key point that I wish people understood. From an economic standpoint, articles like this one are really just arguing that the supply and demand in several different markets should be lumped together and aggregated. the claim is that these different markets aren't actually selling a different product; so there is something like Marx's labor theory of value going on or something. But it just seems dubious.

It's different if you are arguing that they will inevitably merge. But if you're arguing that we should artificially merge them, that doesn't make a terribly large amount of sense to me. Or that we should not merge them but we should just act irrationally in a market to be consistent with our actions in another market, again, that sounds like people being excessively idealistic.

cheph7• 6 years ago

This is the key point that I wish people understood. From an economic standpoint, articles like this one are really just arguing that the supply and demand in several different markets should be lumped together and aggregated.

No, it is not. This article is arguing the opposite. The article is arguing that you should ignore the fact that the labour market changes and still demand that you get market rates for some arbitrary other market which is no longer the market that you are operating in.

If this article was arguing we should artificially merge all markets they would not have a problem with getting a pay cut when the market becomes the whole of US instead of SV.

WA• 6 years ago

This. If I have to support my parents financially and physically, my cost of living are higher in a rural area than living like a student in SF. So what makes cost of living? It’s a BS metric.

JackFr• 6 years ago

Well your employer cares not a whit what it costs you to live. In aggregate though it is useful as a baseline estimate of how they are going to adjust salaries between locations. Remember, it’s not just software engineers. Receptionists, drivers and food service workers likely make different wages in different locales, and are not typically involved in intense individual HR negotiations.

lemonspat• 6 years ago

I really don’t understand your argument. NY and SF cost 4x for just housing from where I live, and the food & taxes are more expensive.

Call it cost-of-housing or cost-of-equal-expenses, or whatever but the name doesn’t matter. The costs to the employee are different

But I’m a remote employee right now and do want equal pay

DangerousPie4• 6 years ago

I think what a lot of people that argue for this kind of thing ignore is that most people in the US are actually still being paid very well on a global scale, even if they don't get a SV salary. If everyone works remotely and wages are equalised, wouldn't the natural conclusion be that wages should go down quite a lot in most Western countries?

eloisant2• 6 years ago

It's not going to be completely equalized, even if everyone goes remote.

- When working in a team, timezones matter

- Labor laws also matter, and a company needs to do some paperwork before hiring workers in a new country

- Companies are still going to hire workers with similar skills to their employees, so Big Tech and Silicon Valley companies are not going to suddenly hire people who only have experience working at outsourcing companies

DangerousPie4• 6 years ago

Timezones matter, but parts of Latin America are in the same time zone as the US and parts of Africa are in the time zone as the EU.

Paperwork and laws matter as well, but if you can save 75% of your salary spending you'll deal with that.

Big tech and SV hire people straight out of university, don't they? What's the difference between hiring an MIT grad that stayed in the US and hiring an MIT grad that moved back to their home country?

n0tsurey45• 6 years ago

Most of these companies could already sponsor workers from outside the US, so they already tapped a pool of global workers. If they want highly skilled employees, which will constantly be in demand, then the cost to hire them will still be high. Salaries will drop in cost for less skilled roles, and will likely be outsourced to countries such as india, but quality will also drop.

So if employers want to be competitive then they will have to pay well regardless of location. In Europe we see a lot of US applicants these days, some good some bad, but we pay equally for most part depending on skill set.

DangerousPie4• 6 years ago

The whole point is that what makes a competitive salary will go down as the supply of workers increases.

judofyr• 6 years ago

If you find yourself in a situation where your current salary might be at risk due to recent relocation then hopefully the following write-up can help you to negotiate equal pay for equal work. It is a curated list of relevant points to formulate a strong argument why one should receive the same or perhaps an even better pay for the same work carried out from a remote position.

I think this article would be more helpful when negotiating if it also included the arguments from the employers point of view and how to respond to those. The most important point being: "The market price for developers in your situation/area is X".

I also find the argumentation a bit inconsistent: The first section is "Same value, same pay", but then later it is "Higher cost, higher pay". Now what is it? Is your pay determined by the value you provide or the cost you have? Or is it a combination? If so, how do you balance it? Should "Lower cost" (e.g. no longer paying for commute) also lead to "lower pay"?

rocqua2• 6 years ago

Does the company care about your location? Then they get to care about the market for my position at my location. If they do not care about my location, they don't need to care about a location dependent market.

einpoklum• 6 years ago

Many begin to see remote work as not only a necessary consequence, but rather as a new opportunity to diversify their workforce, increase employee productivity and cut some cost.

Excuse my cynicism, but:

"diversify their workforce" -> use subcontractors, temporary work agencies, and other people who are ore

"increase employee productivity" -> From the experience of myself and people I know, productivity working remotely is generally lower than working on-premises, albeit with some exceptions. This sounds more like the potential for making people work longer hours and be on-call during off hours

"cut some cost" -> That seems to be the opportunity here...

The biggest cost saving obviously comes from office space,

I'd guess that the biggest cost saving probably comes from reduced salaries. People working remotely are easier to control and are much less able to resist management initiatives through interaction with their peers (and I'm not even talking about unionization, which is already very low in the US).

We should never assume the debate is between different benevolent entities who just disagree about the proper moral criterion for setting wages. No. Those are commercial companies which have a tendency to depress wages when the opportunity arises. That doesn't mean they'll always do that, but it certainly means that their considerations and motivations are not what's best for employees or what's morally superior, or even what's fair.

gnicholas• 6 years ago

Some companies are saying they’ll cut pay for employees who leave for lower CoL areas, and others say they won’t. But in the long run, won’t most companies shift toward lower default salaries and then offer bonuses or specially-negotiated salaries to recruit workers based in SF/NYC/etc.? I’m not saying this is what I’m hoping will happen — just that it seems like a likely outcome.

rullelito• 6 years ago

What is the incentive for the employer to do this?

throwaway3699• 6 years ago

I really don't like this point, as an engineer from Europe. Workers who move out of SV and take a cut will still make more than I ever will.

Salary has nothing to do with cost of living. It correlates somewhat, but ultimately all that matters is cost of labour. If we're going for "equal pay for equal work" then employers could easily pull wages down to a global minimum (now that "the market" is the whole world).

I live in London where things are super expensive, much like SV, but I get paid far less. How is that fair?

tjansen2• 6 years ago

I think this demand is dangerous for people in the West, because it will accelerate the (inevitable) global pay harmonisation. An average Polish software developer gets about 27000 USD per year. In the US, it's 108000 USD/year. Do you really want equal pay? Do you think, being in 6-9 hours away and speaking better English is enough to demand almost four times the salary? I wouldn't want to bet on it.

marcus_holmes3• 6 years ago

Isn't this the same thing that happened with India, though? At some point the entire subcontinent seemed to be working in support or engineering for Western companies. And then it kinda balanced out. It's still definitely a thing, but it didn't kill Western software development rates as people predicted (it did kill IBM though, as people predicted).

FartyMcFarter4• 6 years ago

Do you really want equal pay?

And conversely for a company: do you really want to spread out your developers over very disparate timezones, different cultures etc?

gambiting6• 6 years ago

Well the argument that the author makes is crucially about one argument - "equal work". For it to be really equal, these external influences cannot have an impact, and we know as a fact that they do.

gambiting6• 6 years ago

On the other hand(and I'm Polish myself) you can live an exceptionally good life in Poland for 27k USD/year. Living in Poland I'd be happy to accept a salary that makes me very comfortable financially, even if theoretically the same position elsewhere pays more.

I think most people get it wrong - it's not that people living in cheaper locations are underpaid. It's people living in more expensive locations that are massively overpaid. Just because a software engineer in SF can make $100k/year doesn't mean that's what the position is worth, it just means these companies are massively overpaying.

sz4kerto3• 6 years ago

exceptionally good life in Poland

Compared to your environment, sure. However, you'll never drive a Tesla and buy $4000 road bikes when you're on $27k/y.

Just because a software engineer in SF can make $100k/year doesn't mean that's what the position is worth

It means exactly that in a free market capitalism (and while we're not living in a pure free market, we're not _that_ far). Why would a company overpay? (Sometimes they do, but not 4x, and not consistently.) In case everyone's massively overpaying in SV, then you could just start a company there and pay people half the salaries and be extremely competitive.

imtringued2• 6 years ago

Those companies are not massively overpaying. The cost of living acts as a filter so that only the most productive software jobs are done there. Take any industry and imagine if you could "kidnap" the top 10% of workers into a city. Suddenly it would look like workers in that industry are highly paid. It's like survivorship bias. You only see the good parts.

n0tsurey45• 6 years ago

I don't know what country in eastern europe finds 27kUSD / year "exceptionally good". Developers in east europe earning such amounts are junior level as wages are going up as a result of western clients / employers finding they deliver higher quality work than say india, or pakistan. Most people I know in the area, with senior level experience, are at around double that figure. If you factor in ever growing demand for software engineers in the EU then wages are going to go up even higher.

neilwilson• 6 years ago

You can't have global pay harmonisation in floating rate currencies. Harmonisation is fixed exchange rate thinking.

It would happen between Scotland and London, but not (to the same extent) between Poland and London.

Once you move something abroad the output becomes an import which ultimately has to be balanced by an export (or mercantilist tricks which is a whole other discussion - see China for details).

The correct response would be to unionise, rather than throw hands up in the air and continue to feel exploited.

There is a shortage of skilled staff. If your current employer doesn't appreciate you, then find one that does.

cheph7• 6 years ago

The correct response would be to unionise, rather than throw hands up in the air and continue to feel exploited.

Why not just find another employer which pays the rate that you want? And if you can't do that, why do you deserve that rate?

jlangenauer• 6 years ago

A lot of this sounds like some of the highest paid people in the world complaining that they are unable to practise lifestyle arbitrage by combining their high salaries with a low cost of living. This is simply not an option for the vast majority of the world.

So we see this "pay me, but no-one else, for the value I create" nonsense, as though programmers alone should be exempt from the dynamics of supply and demand.

If we're going to go down this path, then let's pay nurses and doctors for the value they create, which has been proven to be extraordinarily substantial this year. Let's pay supermarket cashiers, truck drivers and shelf-stackers - the people who had to literally risk their lives so that the rest of us could have food available during this pandemic - for the value they created in the rest of us not starving. Let's pay child care workers and teachers for the value they create, which I wager will often be far greater than what some programmers contribute.

sneak2• 6 years ago

I believe that this is a false dichotomy, or perhaps even a straw man.

Engineers aren’t asking to be paid the value they create, they’re just objecting to pay cuts for physically moving while doing the same job.

FartyMcFarter4• 6 years ago

If engineers are not paid based on their local market, and also not paid based on the value they create, what is their pay based on?

I can think of a few other alternatives:

- some new "remote workers" market that doesn't exist at the moment

- the pay of the lowest paid region in the world

- the pay of the highest paid region in the world

I can't see the last option being reasonable in any way, and the second option also doesn't seem like it would work in practice. My guess is you'd see something in between the first two.

This would take a long time to stabilize, so it's not straightforward for companies to implement I think?

CalRobert• 6 years ago

I work fully remote from a very low CoL area (house under 100k, monthly expenses for a family of 4 under 2k, etc.) and if I demanded SV pay I'd immediately be fired because my neighbour, who also has a low CoL, will apply for my job and work for 70% less.

That being said, I still do much better than I would with local employers, and I like not stressing out about heavy liabilities.

cheph7• 6 years ago

Engineers aren’t asking to be paid the value they create, they’re just objecting to pay cuts for physically moving while doing the same job.

While ignoring that their pay in their current location was as a consequence of a location specific market, while if the market becomes the whole of US, the market rate will obviously change.

If you have to discard this for the argument to hold water, it is a bad argument.

frereubu• 6 years ago

I'm not quite sure what you're going for here, but your last paragraph seems pretty reasonable to me. Was it intended as "look at these stupid ideas like the one you've just suggested", or something else? If it's something else, I'm not sure I understand what it is from what you've written. Otherwise it feels like a bit of a straw man you're arguing against, because I didn't understand the blog post in the way you're characterising it.

fortytwo79• 6 years ago

I think he/she is saying labor rates are a supply/demand calculation, not a value one. The I-beam in your house might be the most valuable thing to the structural integrity, but it's probably not the most expensive thing in your home. Scarcity dictates that something else less valuable to your existence may cost more. You may not value that scarcity enough to pay that premium, but value alone does not set price. Air is the most valuable thing to my life, and I pay nothing for it.

So, a nurse or teacher provides a very valuable service, no doubt. Salaries won't naturally go up until availability goes down.

pornel• 6 years ago

You feel like a spoiled rich kid compared to a teacher or truck driver, but you're piss-poor compared to the people who own the corporation you work for.

By demanding to be paid closer to the value you create you're not robbing nurses from their unfairly small salaries, you're demanding a few more crumbs from the pie shareholders are taking.

rocqua2• 6 years ago

I can see why a company would want to offer different salaries for the same job when worked in a different office. Because in certain locations, the market is going to be tougher to get people in. Hence in order to get staff there the company will need to pay more.

If previously agreed upon, it can be reasonable for a company to remove this location-dependent raise in salary if someone voluntarily changes their location.

sneak2• 6 years ago

It’s very simple to keep your pay from being reduced when you go remote: simply let your employer know that you will not accept any pay decrease.

There are lots of employers.

FartyMcFarter4• 6 years ago

But are there lots of employers paying SV salaries for remote workers?

cheph7• 6 years ago

No, and if no other employers will offer you that rate, why are you entitled to it from your current employer?

thiago_fm• 6 years ago

People are paid based on location, duh. If it's "free market" that gave them those stupidly high salaries, it's "free market" that will take it away.

Developers from the whole world that get paid 1/10th(or less) of those SV engineers that the only differentiation factor they have is an American citizenship would happily take their jobs.

I like this situation because it won't take long until all software work is moved elsewhere outside America. I doubt companies will accept that kind of shit from employees, because if they do, they will lose money. And if they don't, employees are spoiled, they think that those high salaries are a right, will make a big case of it and caos.

cheph7• 6 years ago

How do you prove equal work? This is in the title, and in the article already the goal posts are moved to "same value" and "same duties".

And the actual argument has nothing to do with equal value, work or duties even, and it is a crappy argument, because the price of labour has to do with the market for labour. If the market is the whole of US instead of SV, then you will get market rate for the whole of US, which is lower than SV.

You think someone in Poland will get SV rates just because they are insufferable enough? No. They won't.

And you know what, if you don't like what your employer pays you, go to another one. If you can't find one that pays you what you think you are entitled to, what is the basis for this entitlement?

dustinmoris• 6 years ago

Author here. A few comments:

- I am not a Bay worker, I don't even live in the US, I never had a pay like an average SV engineer and I am not even an employee right now. This blog post was not written with the intention to help myself, but others.

- Anyone can find any flaws in any argumentation, but that is not the point. I wrote this because I thought if it only helps a single person to motivate them to fight for a better pay, then it is worth it. If someone doesn't stand up for their own pay then it doesn't make other employees better off. The alternative is that some big corporation just managed to exploit the general public in yet another way. My blog may not help everyone, but if it does for some I consider it a success.

Thanks for sharing and your inputs though!

cheph7• 6 years ago

Anyone can find any flaws in any argumentation, but that is not the point.

If the veracity of an argument is besides the point, why even write it?

michaelt• 6 years ago

Seems to me employers have a choice of only unfair options, for historical reasons.

A company starts with an office in London, and employs a bunch of people at London market rate. Some people move from Poland to London to take those well paid jobs.

The company grows for a few years and needs to open a second office. They open an office in Poland as paying market rate there costs a lot less.

Then along comes Covid-19, and some of those Polish employees in London want to WFH from Poland. The company has a bunch of options and they're all shitty for the company:

* If they let the Polish employees in London work from Poland while earning London market rate, they'll have two sets of Polish employees earning radically different wages for the same work in the same country.

* If they tell the Polish workers they'll get a pay cut if they move, that's arbitrary as they're doing the same work regardless of their location - and it deprives them of the family support Brits can access, and it's essentially unenforceable anyway (who's going to report themselves as due a pay cut?)

* If they cut everyone's salaries to Polish levels, the London office will evaporate instantly.

* If they raise everyone's salaries to London levels, why open a Polish office in the first place?

FartyMcFarter4• 6 years ago

(who's going to report themselves as due a pay cut?)

Legally you probably have to report yourself.

It's rarely (or never?) legal to pay taxes in one place while permanently living at another.

tomwojcik• 6 years ago

Can't wait for the "they took our jobs" (south park) movement from SWE in US.

I think governments will try to prevent that with some sort of taxation.

erik_seaberg• 6 years ago

I’m not convinced that many employers will remain remote-first after the pandemic is abated. We were complaining for years that remote work made more sense than packing people into open plan offices, and almost nothing came of it. At most the Bay Area might lose its high concentration of strong engineers (because the cost/benefit of staying here is poor when everything fun is closed and all tech work is remote-friendly), to be replaced with a more fractured market of small regional hubs, adding friction in changing jobs.

the_gipsy• 6 years ago

If I'd be willing to work american hours, I would definitely move to SV and get me a million dollar house subsidized by a company. This is so absurd. At least with this salary normalization, the bloodsucking landlords won't get their cut anymore.

juancn• 6 years ago

In a knowledge economy, there's no "equal work".

There are no two programmers that actually do the same work or that have the same job (similar ones yes, even substitutable, but not the same).

That works only for reasonably repetitive tasks with well defined boundaries, such as an assembly line worker.

Equal Pay for Equal Work

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