20% pay reduction when moving out of Bay Area. Is this normal?

Question

I work for a big company in the Bay area.I've been working remotely from the Bay Area, and just moved from the Bay Area to Colorado.My company just sent me a letter which reduces salary from 200 to 150. That's like $40,000 or a 20% decrease.Is this a normal cost of living reduction? Is that bay are that expensive?

tssva · Accepted Answer

I'm not going to address whether paying workers less for the same job when they live in different areas is appropriate, but if you are willing to go along with the premise that it is than the reduction from 200k to 150k isn't out of the question for the areas involved. You didn't give exact areas but I put San Francisco and Denver into 5 different online cost of living calculators. Denver tended to be the most expensive area in CO these calculators had data for. They didn't agree to the dollar but in general the cost of living in Denver was reported as about 38% less with an equivalent living standard salary being $124,000.

lotsofpulp · Answer

It has nothing to do with cost of living. Your employer is simply betting that you will not be able to find other sources of income that can compete with their reduced offer.

caloriesdont · Answer

By accepting this deal, you'd be giving "free money" to the company out of your own pocket.They will get the EXACT same value from your work - WHILE paying you less.

Rumel57 · Answer

Tell them to shove it and go find a new job. I work remote from a state right next to you and didn't take a pay cut for where I live.

hollasch · Answer

It would be very interesting to include this data on the various salary sites.