Location based pay is killing my motivation, how do others handle it?

Your pay is based on the cost to hire your replacement. That’s it. There’s no crazy conspiracies, there’s no moral failing, they’re not running a calculator of how much value you generate. Would it sap your motivation to learn there are people doing your same job at FAANGs making double what you make? Or that some other job makes more money than you? Location based pay is just another variable. As with everything in jobs - if you don’t like the comp structure, it’s very rare you’ll argue them into changing it. If there are other companies who have comp structures you like more, go get a job there. If you can’t find any, you’ve probably learned something about the job market.

It is a negotiation not a fairness discussion (even though fairness is part of the negotiation arguments). I asked about it in my current job before accepting the offer and was able to successfully negotiate it. In your situation, it seems that the only way is to look for a new job.

Anyway, the way I negotiated was very simple. Basically a version of ”I understand that this is a good salary relative to my local market, but I am not even looking for jobs in my local market. I am comparing your offer to offers from other US-based companies that I received for remote work.”

That was it. The part of other offers was true of course (even if for companies that I wasn’t too excited to work for). No need to even reply to their arguments of “company policy”, “cost of living”, whatever. I only have to state my point of view.

There is also the topic of me not receiving benefits like health care and 401k and other stuff that American employees get. I didn’t use this argument (didn’t occur to me), but I have the impression that this was considered in their calculation in how much to raise their offer.

Kind of depends what you are getting paid, but if it is less then $100k say, you can easily find remote jobs that pay more, play them off against each other. The companies are using sharp business practice to get you as cheap as possible, you can do the same to get as much as possible. Apply for 100 remote jobs, interview, smash the interviews, ask for top $ from all of them.

See https://remoteok.com/, etc.

If on he other hand, you are paid $200k and the colleagues are being paid $400k ... well you are well paid, might be harder to get a fully remote pay rise, but not impossible I think.

Now lets say you are paid $50k for argument sake, and you talk to your boss saying you want $100k and you can get that elsewhere. They would be crazy to let you go as $100k is still probably less than they are paying in the US if you are doing the same job.

What I have learned is the 'policy' evaporates under enough pressure. Of course they may still say no, in which case look around.

If they are paying you less than you are worth, they are not your friend, don't feel bad about moving to another job immediately.

If I am hiring outside the US, I'm doing it to save money. I'm willing to accept the downsides -- schedule differences, language barriers, etc, in order to save money. Otherwise I would just hire someone in the US. So if a foreign dev were to tell me I had to pay the US rates, I'd pass.

I think you should negotiate for as much as you can, but it is unrealistic to benchmark yourself against US employees of a US company based strictly on your skillset without any appreciation for other perfectly valid factors.

I don't wish to sound harsh, but you've got selective blinders on to the arguments that favor your position. And your position is arguing from the point of view of someone who already has the benefit of a job in a company and asking the company to justify itself why they don't pay you more.

Here's a different point of view.

A company can choose to consider people for work either close to their offices or remote. People who get hired close to offices come with an expectation that they will go in to work at some point, and be collaborative and possibly more effective than people who are remote. This point is debatable, but is up to the company to determine for itself whether it's true or worth the premium. There is a limited set of people living close to offices, and costs of living are generally higher, and pay reflects those factors.

If the company is to consider people who are remote and are not going to be coming in to work, that opens up practically the entire world for them as a labor pool (modulo time zone issues, etc). People in many other countries get paid far less and are willing to do much more work for the same pay than in the US.

If you are remote, you are competing against the labor pool that is similarly situated. If you can show that your value is disproportionate to the average, maybe you can negotiate.

Try to reason through things in a way that reflects more objective reality rather than your perception of it, or your feelings. No one is "forcing" you to migrate or do anything. You are seeking high pay and remote work. You're totally free to go out there and find the company that's offering that. Your company is offering pay and a job, at rates that you can decide to accept or decline. You make your choices, and either feel good about them, or not.

Your company is gaslighting you. None of those reasons are valid. The first one is the closest to the accurate answer, but the real answer is "because we can hire people in your area for this rate". Try contracting, for a US company, for US rates; set a rate that's comparable to what other US contractors charge, and don't take clients that want to negotiate your pay based on your location.

You might also try building some reputation on Open Source projects with a strong community, the type that's regularly being hired for. Get referrals from your colleagues in that project for people looking for employees or contractors. Cite the rates your colleagues make, and don't accept location-based reductions.

(Also, make sure you have a job or contract lined up before you leave, unless you're really confident you can get one at the rate you want.)

It is simple economics and markets in action.

It appears you are probably employed somewhere in Asia and you are comparing with similarly titled roles within your company/outside your company in other geographies like US/EU.

Salaries are generally local labor market and demand-driven. Think of it this way. If you leave the company, chances are the company backfills your position with someone having the same job skills from the same local market. If there is a certain supply of labor force in your local market at a certain salary level, your company is going to use that to peg your salary; not the salary level at which they get similar skills in Amsterdam/London/New York/San Francisco.

Also, if the company has established offices in say US/EU and India, they are trying to play a cost arbitrage play. Certain goods/services cost higher in US/EU and lower in Asia (and vice versa too). Labor costs are higher in US/EU compared to Asia (most locations).

Unfortunately, this is the norm and has been for centuries.

My advice:

1. Stop doing exchange rate conversions of foreign labor market salaries for the similar positions and losing your mental peace.

2. If you are in a position where you can immigrate to the foreign country, consider doing that (if not permanently, at least for a few years).

3. If that does not work for you and if you have selling/business development skills, you may consider freelancing for clients from the US/EU regions and bill them as a contractor at rates they are used to domestically (this is a whole another ball game and you need to build a client roster and work may/may not be steady).

I see multiple upvoted posts that the pay is based solely on "cost to hire your replacement".

But in some companies, after they decide to make an offer, it will be "how much to get you to accept". So that wouldn't be a function of their options so much as a function of your options.

As to how the calculus changes when it comes to retention, in your company, I don't know.

(Tech companies overall are famous for being good at luring talent (e.g., huge pay bump from current place) but bad at retention (e.g., small raises that don't track with market and value to the company). Hence the common practice of job-hopping frequently, and all the long effects that might have on software engineering practice (e.g., resume-driven development, and people not around long enough to see how engineering decisions play out).)

Do you trust your manager to deal with you in good faith, to have your best interests in mind, and to represent you competently with the company machine? Maybe see whether your manager thinks the company is paying what the processes (not necessarily individuals) implicitly think is what they can get you to accept, rather than what it would cost to hire and retain someone who could provide as much value to the company. If it's the former, see whether that sounds exploitative to you and your manager. If it does, maybe manager can look into whether something leadership wants to reflect upon, and see whether it can do anything to improve that.

The answer is the same here as for anyone else who wants a substantial raise. You need to find a new job. It’s possible your current employer could match a new offer or even pay you more, but first you need to show them you’re serious about leaving.

    I've raised this issue with my manager and they've told me that I can 
    transfer if i want those pay scales but that's not a possibility for me. If 
    the company is willing to pay me that amount in a different location, why 
    can't it pay me the same here?

Get another offer or several and then have this conversation again. The equation changes considerably for your manager when you are talking about leaving for a better offer. Right now he has you as an employee for a price that saves him money. When you have another offer he has to weigh losing the knowledge you have built up about the job and the business, Locating, Interviewing, and Hiring a replacement against paying you a higher wage.

I think there is a major competitive advantage here for small employers that know what they are doing. If you are running a small US/EU based company and you find someone great in an offshore local, then you can dramatically increase their loyalty, motivation, and potentially output with relatively modest and reasonable raises.

I fully understand that larger organizations make the transition to an MBA bean counter mindset that attempts to homogenize and commoditize employees, and I don't have any suggestions to change this status quo.

But small owner operated companies don't have to play by these rules. If you are leading a small technology company you should be well aware that there are huge differences in output between employees and your ability to actually know your people by name along with each of their strengths and weaknesses is information asymmetry that you have over the bigger competitors.

The reasons they gave are lies. They're paying you less because (they think) they can. That's all there is to it.

Another reason is because they know where you live, and the salaries in that location. Keep that in mind when someone says they have "nothing to hide" - this is how companies use such information. To better determine the absolute minimum they can offer you (or maximum they can sell you).

"The reasons they've given me are weak and I want to debunk them."

Why do you want to debunk them? Is it:

A) You believe you can change the policy, and thereby get paid what your US colleagues get paid?

B) You want to validate your feeling (that the situation is unfair) and be certain that you are right?

C) You are curious about how the world works?

D) Something else?

(FWIW I've been in the same situation, working at a FAANG company outside US/EU, with lower pay scales.)

I can tell you're in India. Just a few thoughts from a fellow Indian:

- You are dramatically underestimating the cost of food and energy in Europe and America.

- Countries with free functional education and healthcare have a much higher effective tax rate than India.

- With the exception of Mumbai, a senior software engineer should be able to afford a house in any Indian city. If that is not the case, it's very likely that you are getting short-changed. And keep in mind the median sales price of houses in the US from April to June was 440k USD. That's more than 3.5 crores.

- The pay difference between India and the West for software engineers has shrunk dramatically over the past few years. If you've been at the same company for a long time, maybe it's time to switch.

- Top up health insurance is cheap. There really is no reason why an illness should financially ruin you.

Please don't see this as a lack of empathy, but I think the only solution under your control is to apply to other positions and leave when you get a better one.

And if you apply to many and can't find a better one, then try to see it as 'they pay me better than anyone else' rather than they pay me less than others in the company.

I believe (but have no evidence) that smart companies will minimize the location differences to get better talent and will get a competitive advantage, but you may need to search ...

> even though we do the same work

This is dubious. I see a lot of "I'm doing the same as him/her/that level but only getting paid x" and it's often not true. Either in terms of responsibility or expectations (for example nobody really thinks an offshore / outsource provider will deliver the same as in-house) you are probably doing less. The solution is to get the job you are comparing yours to.

Edit: this comment posted at the same time as mine is saying exactly the same from an employer's perspective: https://news.ycombinator.com/item?id=32718612

Which scenario are we talking about here? Is it:

You live in a poor country making $50k-$100k, and the US devs are making $100-200k.

You live in a poor country and get paid sub $30-50k, and US gets paid $100k+?

I used to live in Ecuador, and the “official” min wage monthly is ~$300USD/mo. So essentially you can hire a full time nanny, cook, etc for sub $1200 easy.

That’s never going to happen in the US with less than $400k+.

So in US 150k+ is top 20% of income or there abouts. But in a random poor country, $100k+ is probably top 0.01%, right? What am I missing here?

Also what is your skill level and could you quickly replace this job with another at the same or higher rate?

Lastly, if you really want to move, there’s 30+ countries you could move to in the interim if you really wanted out of your country. Canada is relatively simple, there’s tons of Caribbean islands that can grant you citizenship for sub $200k, which you can then use to travel freely without visa restrictions globally. Same with EU countries like Malta etc.

The cost of living point is very valid. A great salary in Hanoi is most likely to be a very low wage in San Francisco. You can't expect an employer to pay way above the local market rate for a position. Bottom line, they will always find someone to work if they offer a bit above the local market rates. The salary, whatever miles away makes no difference.

As far as how to deal with it, look a round you I bet your salary is a very good wage for the area you live in. If not then find a job with a local company that pays better. Software developers get paid well all over the world relative to where they live.

BTW, even with the wages in Silicon Valley, most developers there can't afford a house close to where they work. Inability to buy a house with local wages is a common problem in the big cities of the world so it's not an issue related to your area alone.

Change location based pay to gender/race/religion/veteran/disability/etc* and half of the comments talking about market dynamics will have a very different ring to it. The change will be slow if it happens at all, after all many paychecks and bottom lines depend on not acknowledging the situation. The best you can do is probably raise awareness in the meantime and not feel shame about being demotivated.

https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...

*people are as much in control of their religion and veteran status as their location

This sounds like Gitlab? It was my first thought as I read just this page below yesterday:

https://about.gitlab.com/handbook/total-rewards/compensation...

Your company is not your buddy. All these talks about cost of living adjustment is nothing but beautiful horse shit to sugarcoat the truth (below).

You’re essentially a tool they try to buy as cheap as possible.

Your job is to sell yourself as high as you can.

The good news is that both you and your company have freedom to choose and compete with other entities.

So the only way for you to fix motivation is not talking it through, but rather to learn winning in this free market game.

I agree with you that most of the general HR arguments don’t hold water and are philosophical at best. All they try to do is hide the fact that you are not paid the way you are because of your talent or efforts. In most EU/commonwealth countries you can thank unionism for the benefits you have.

For multinationals, one thing to note is the location of the employees normally has very little to do with the talent and staff costs but mostly tax, politics/corruption, networking, or leadership preferences. Employee talent and costs are really generally not the focus of why companies setup shop where they do.

It can mess with your mind, and feel really unjust when you know of US sized bonuses going out that equate to more than full time salary in other regions doing equivalent roles. Even staff that are generally mediocre can often wing it whilst others go over and above getting a pittance.

It helps my sanity to know that we are all just cogs in a system and it’s not at all personal. Salary is a cost for doing business in some locations and everyone is completely replaceable. Also AI is probably going to wipe the floor of us all soon enough…

I’ve only ever seen it labeled as cost of labor, not adjusted for cost of living. The labor market where you are at has essentially pegged you to a certain salary.

You feel like a cog in the machine because you absolutely are one.

Paying a knowledge worker based on their physical location will soon become a relic, if your company does not realize this… quit and switch jobs.

If your job requires you to be somewhere physically, your compensation is tied to what it would cost to replace you.

In my experience employers rarely know what their Cost of Vacancy really is… let alone their Cost per Hire.

I expect this will change.

> The reasons they've given me are weak and I want to debunk them.

Debunking them on HN is pointless.

The only way to debunk them is to find a job that will pay you what you think you are worth.

At least now you know the pay scales and should have an idea for what you are worth based on the work you can deliver.

Your labor is being exploited for profit more than your coworkers'. Exploitation of your coworkers' labor has a smaller return on investment than that of exploitation of YOUR labor.

Despite how flippant other commenters may be with the "bad feels" of this experience, feeling bad about being alienated from the fruits of your labor, and being, essentially, colonized by capital, is completely normal, human thing. Especially so right after discovering the extent to which your labor is valued less than that of your peers.

This sucks bad, and don't pay attention to commenters who are trying to convince you that actually it's fine because that's just the labor market. No, it's totally valid to feel bad about this.

It's in part the cost of living (which is a very valid argument) and in part basic supply/demand.

If there is an oversupply of qualified people in your country willing to work for lower wages, that is what you are competing with, not people in the EU/US.

If this is bothering you too much, the best thing you can do is move to a local employer where the salary range is more to your liking.

You have to think from the employer’s standpoint: if they pay you US or EU salary, why should they not just hire in those locales where it seems the company has bigger presence, or is maybe headquartered. Why would a company take the overhead of maintaining an offshore presence if there is no benefit to it.

Moreover, you are paid the local replacement cost, as in what would it cost the company to hire your replacement in your market. Unless you bring a unique value to the company you will be paid local market rate. If you are unique, then you will be paid whatever you want.

I'm living in a country where the monthly minimum wage is $275, and I work for a US company with a good salary, at least in my country.

I understand the basics of economics, but I must say this pay gap is pretty disappointing for me too. Yes, I'm living in a country where the cost of living is much cheaper, but the same country is classified as "not free" by Freedom House. The only reason I still live here is to save money before I, hopefully, move to any first-world country.

I want everyone to understand that the cheap cost of living usually comes with restrictions on human rights and mental illness.

In the job market you are willing to work in, can you get the $s you are wanting? By that, I don't mean there's a possibility some company might pay you the $s, but that it would be reasonable to expect quite a number of places to pay you those $s. If not, then your market value isn't the same as it is in other locations. You already demonstrated in your question that there is value in a particular location, for you, family and friends. For companies, they operate in whatever locations they think is best and pay competitive $s for that location.

Location based pay is ridiculous and you shouldn't have to stand for that. You're right to feel resentful.

Find a role for digital nomads and make the nomadic decision to stay put while claiming higher pay.

I agree with you that it's unfair and senseless but it's market dynamic (supply and demand) with capitalism bend to it.

There are probably hundrends of people with your capabilities, where you're now, willing to work at your current pay scale and probably thousands elsewhere in poorer places willing to work for much less than you. Not to mention even more - who are as capable as you're - but lack the opportunity you have because things like infrastructure (internet access for example).

On the flip-side your colleagues are probably looking at you as a saleout - depressing thier already-high (to you) wages. And yes, they're absolutely right beause beside your skill-set, the company is saving money by paying you less and in addition to having more laverage on you. Remember the outsourcing debates in the past years? Someone else is probably saying you stole their job too! What do you say to such person yourself?

Even here in America, Silicon Valley salaries can be truly shocking for some of us outside the valley. I think it's a little unfair to us smaller campanies without millions of VC money to burn but such is life. If you started a company where you're - will you be paying American salaries?

I agree with you that you shouldn't migrate to get paid the same for the same job. Hopefully as jobs become location agnostic - we can only look into the future on how the market will change and balance out the unfairness you're feeling.

The reverse would be unfair as well.

If someone have to live in San Francisco to make 250k/year but pay a high rent etc. And you make 250k/year living in Ho Chi Minh that would be unfair to them. And would be a little bit unfair to your local people, the selected few (employees) able to work remotely would literally make 80x time the local salary.

There is no way to solve this problem, if you want your compensation to be independent from your local area. Become an expert, start being a contractor and cross your fingers.

If in an expensive location and are compensated accordingly (such that it is possible to purchase a property), you are strictly better off than someone who does the same in a lower cost area over time. After 10-20 years the person working in the high priced location will own an expensive asset while the other will own a low priced one. If they liquidate all assets, all else being equal, the person who lived in the expensive location is likely far ahead financially.

The very concept of "fairness" won't help you and will likely hurt your efforts to succeed in life. Besides being somewhat subjective, a business must prioritize profit over fairness in order to survive in a competitive environment. Your employer will pay you what they believe (possibly erroneously) is their optimal for profit, modulo the legal environment and company politics.

I can fully understand your frustration. Out of curiosity, where exactly do you live (country)?

I think that you can frame this issue the following way: the pay in country X, compared to a richer country like US or UK or Australia, is a function of cost of living in country X, but also "competition" in country X. Meaning, most other jobs like yours in country X pay at a certain level, which is maybe 1/2 or 1/5 of what you get in the US. But employer knows that, and therefore doesn't have to offer much more than that to convince you to take that job.

Some of what your boss is saying sounds like BS to me. But the hard truth is that you don't have a lot of options. An alternative could be to do freelance work for US-based customers. If you're really good at your job, you should be able to get close to, or even surpass, the pay of a salaried person like you in the US.

I can humbly suggest you to read some books or blog posts on career development. Most of them, IMHO, are not very deep or informational, but there are some gems in the mix. Sorry I don't have one to recommend.

I feel the same way from Canada and that’s why I’m going to leave the country. It’s humiliating to talk to my American coworkers about my personal life

You can't argue with your bosses because they don't care about the points you make. They have the power and know it. You can migrate, or find better job. Maybe look into unionizing (no idea about your country).

I learned this a few years ago. I can make great arguments but it doesn't matter. The boss has his mind made up and he'll say anything, even blatant BS, to justify it.

Your pay is based on your value to the company. Things that diminish your value to the company: Being in a timezone different from the main office, speaking a language or dialect different from the main office, having different laws than the country in which the main office is, being in a satellite office where management's chain of command is less effective, etc. MAANGA companies set up offices in Europe because despite all of these hurdles, European developer salaries are so low that it's worth it. If you want to increase that salary, work on destroying some of these hurdles. Either work with your company to get a product moved to entirely European development (a good example is Ubisoft doing development of some games in US, some in Canada, some in France, etc.), or try to break down some of the barriers like timezone, and vote in politicians who aren't driven by protectionist Europe-vs-US mindsets.

Does this same logic also apply to the price of goods and services you consume? For example, when you go to a restaurant in your location, do you pay them the same as an equivalent meal would cost in US/UK? The chef there is just as talented as one in the US, and the value of satisfying a human's hunger should be the same irrespective of location.

The only part of this that you have some control over is where you work. It sucks because I understand how you feel and what you are going through, but you will have to find a different job at a different company that pays more. That is the only thing you can change.

Your company has clearly communicated that they don't care about how you feel about this.

I, like you, don't like it the way it is when it comes to remote IT job market, but it's very clear how this works. In country X average full stack developer charges Y dollars, recruiters know what average pay is so they will only offer pay within same range (or sometimes slightly more, like 5% more). Companies look for cheap labor and will not pay more than they really have to.

Where I live now the top pay is around $100k per year (fully remote full stack, but similarly dev/ops). Extremely rarely (maybe once in a year) I see an advert paying $200k and since everyone wants to earn this much the competition is enormous. This also applies to FAANG who don't pay more than average market rate.

I don't know if my observation is close to reality but from what I see better paid positions are usually not going through public job boards but through word of mouth and through networks.

There are essentially three explanations for your lower pay

1) You're being paid less than your market price

2) Your colleagues are being paid more than their market price

3) Your market price is not the same as theirs.

If 1), get a new job. If 2), make peace with it. If 3), start to look at why that might be true. I know that a randomly selected remote engineer in the US is more valuable to me than a remote engineer in Eastern Europe who is more valuable to me than a remote engineer in India, for example. The US-based engineer has working hours closer to mine, has cultural context closer to mine, can more easily communicate with a customer in a live site debugging, and overall builds products with a "product sense" closer to what the US market desires. This is of course not true at the individual case, but is definitely true in the average, and a reason why domestic remote engineers will likely continue to be paid more than overseas remote engineers.

In theory I agree with the OP, but I am having the reverse problem now. My startup has an equal pay policy. I live in San Francisco and have a San Francisco salary, but cannot afford a home here without saving for many years and having a very lean budget.

Next to me are colleagues who live in countries where the cost of living is a fraction. They tell stories of the first and second homes they are building and how they agree with the pay policy. They are living a quality of life that is beyond anything I can have while living in San Francisco, and I partly resent this.

Within the company, people have and are still moving to low cost areas, because the company is fully remote. I however am married and my partner cannot as easily be relocated.

I don't give my company name here because it is very small with only a fraction or employees living in San Francisco.

One important point not discussed is that wages paid in a HCOL zipcode will be spent within said zipcode..it fills the tax coffers that funds the infrastructure of the corporations that have a ‘you-scratch-my-back-I-will-scratch-yours’ arrangement with the city govt.

Example: when Twitter and Lyft and Uber got tax moratoriums from San Francisco to establish HQ so the employees will move in and spend their wages and pay taxes and all the good stuff. Except SF dropped the ball. Vs. The South Bay has historically had a better relationship with the FAANGs..Apple or Google will never leave Bay Area. South Bay takes good care of Silicon Valley. And the favour is returned. It costs millions and millions to build and keep 880 et al smooth running.

There is no benefit to paying someone in a LCOL zipcode the same wages as as in a HCOL area.

3) something about not trapping in a high salary job - I dont even know what to say about this. I would love to be in that trap instead of the one I'm in right now where I'm being forced to migrate, where I would loose my family, friends and all the support structures I've built around me, to receive the same benefits as my peers.

You don’t have to agree with it, or think it’s barely reasonable, but you should understand the argument at least.

It’s not about worrying that you’ll feel trapped and that will make you feel bad.

It’s worrying that you’ll feel trapped and won’t quit even if you are very unhappy. Instead you will stick around and be a drag on productivity and morale. Companies would most like workers to be happy and productive, but if they can’t have that they’d rather they quit than stick around unhappy and non-productive.

I'll do you one better: at the start of 2020 I went to Switzerland for a contract and during the 2,5 months I stayed there (until COVID pushed me out) I made as much as in the previous year.

Back home I was working remotely in the same role for the typical local rate (well, +10%) until the end of my contract.

I considered moving there but then I learned that permanent employees aren't compensated as well as I was and kindergarten in Switzerland costs around 3k CHF monthly.

Also around here in eastern Europe it's common for a company to hire people at local rates, but charge the (typically US) client their local rates.

Bottom line is: Q4 is approaching - you might want to start looking for new employment now that slow season is nearing to an end.

Just demand 50-100%+ and watch out for those who have obviously huge markups.

> What do others think about this and how do you deal with this?

One word: counter-offer

Welcome to the world (plane?) of zero-sum games and adversarial strategies! Appealing to fairness doesn't help in this world - because the values and corresponding strategies of your management and yourself are fundamentally adversarial to each other - that is, your delta of profit is their delta of loss. People like to argue sophisticated game theoretical takes that serve to obfuscate this simple truth.

For a more esoteric take: You could as well model our life as a trajectory unfolding across a stack of "planes" - most common people manage to constrain their limited & valuable attention to "narrative plane" or "social plane" where the main "control points" (as in Bézier curves) are mainly various narratives floating around and signals of social (dis)approval applied to you. Compared to the harsher plane of adversarial game theory I mentioned earlier this social plane is much more fuzzy and forgiving (main message - be a nice person, get an average nice life). Yet for all its self-evident harshness, keeping one's attention away from the adversarial plane (where the main control points are hard decisions, often legally-powered, decisions bearing heavy financial and business implications) leads one to sub-optimal outcomes.

If you play this game by its true rules, your score will increase. That being said, I agree with the increasingly common sentiment that this is long-term unsustainable (sobering statistic: https://florentcrivello.com/wp-content/uploads/2022/09/image... ). Some solution is increasingly becoming necessary, and this solution is likely some form of UBI.

Why our politics is dominated by various local and global non-sequitur causes and not this sobering issue of rising necessity of UBI is an exercise left to the reader.

You need to start looking into the skillset necessary to get US pay without needing to be in the US - it's not an infinitely big market but it is there for the taking.

This is an extensive topic I cover for the LatAm community in a podcast - Tecnologia informal.

One major difference is that in some countries (many EU countries) payroll taxes are much higher than in the US, where most income taxes are paid by the individual. So while your quoted salary is lower, the cost to company difference is less stark - your country just makes you pay higher taxes.

Another difference is that tech companies are expanding into countries like yours precisely because it's cheaper to hire people. Not to be an asshole but you see this in the types of projects that cheaper countries get in large multinational tech companies compared to the major hubs too - less direct product work, more things like internal software, tooling, data/devops pipelines, etc.

Well, its mostly your fault. Start demanding more, if you are locked into your current job and can't see yourself getting a raise, move on somewhere else. I was stuck with low European salaries in my first year as Developer. In my second year I quadruppled that salary by setting my lower limit 4x higher and moved to south-east Asia to lower my cost of living by half. My old-colleagues are still complaining about the high costs of living back home, and the low salaries as well. While they would actually be more senior and even more productive in the job I got after leaving them.

> What would the company gain if work from a different location that they would pay me more?

More that if you are in a different location, they pay you less. You are flipping the default here, which is almost certainly American salaries.

1. Your excuse here is not good enough to debunk this excuse. Cost of living is a general cost for people living in that location. Family support is not available for everyone. If you move to this location, you will not like if they use family support as an excuse.

Location pay also affects the amount of taxes to be deducted.

2. I do not understand this. If your manager thinks you are not as talented as your juniors then you have to find a better work place.

3. Again, this seem subjective. However, you are sounding like you do not have any option. If you do then use it, if not then be grateful for what you have,

Organize. You are right. However, there is no easy solution for one individual. Right now you have zero bargaining power.

Together with the rest of the workers in your location you would have a bit of power. You would likely win concessions, though also a good chance of them closing your location entirely. Bringing in your higher paid coworkers could be quite strong, but that might be a tough sell.

Organizing with many others across your country and you might start getting somewhere. Transnationally, even more.

Best wishes.

It depends on your size of company. You might get a small company doing a one-off equalization that pays you way above the local rate but the reason most companies have presence in foreign markets is that labor is cheaper. When that labor increases then they move elsewhere to keep costs down. It's the whole reason for having foreign locations for most US companies. If it got to the stage where wages are starting to get such that the RoI isn't there then the company will pull out and bring the jobs home.

The main reason a company pays a person in one locale more than another, is that what it costs to retain that person in that locale. If you want a good person in the bay area or is going to cost more that a person in another area. Cost of living plays a part. But it is really about the other competitors in the area. But honestly don't be resentful. There are a lot of headaches in the higher pay areas. Like traffic is worse. Is the extra pay worth it? Maybe, maybe not

I'm going to generalize here. It's important to note that there are exceptions, but they are _exceptions_.

You're working for a company, not a person. Companies exist as a way to make money: they have _no_ other motivation. Notions of fairness, decency, humanity, etc, have zero relevance to corporate behaviour. People who work for companies are actively discouraged, even prohibited, from using human morality or fairness as criteria in deciding what to do: corporate decisions are about the short-term financial gains for shareholders.

Employment policies exist to codify the processes used to achieve this goal, because people a fallible, and tend to have moral scruples, and that gets in the way of perfect implementation of the corporate will. They're necessarily a blunt instrument, with inefficiencies, but in a company staffed by humans, that's the best it can do.

The costs of employing someone have several parts: salary + benefits to the employee, taxes due to the locality they're employed, and the costs of equipment, services, office-space, etc, needed by the employee.

The goal of the company is to get the best/most output for the least cost. With some initial overheads (setting up foreign legal entities, structuring to support remote work, etc) foreign workers are often a means to this end.

The only reason the company talks about "cost of living", etc, is because that's what potential employees tell it when they negotiate (or refuse) a job offer. It doesn't care: it just knows that unless it pays that much, people will work for its competitors instead.

The reason you're paid less is because you'll work for less. And if not you, then someone else in a similar location. If the company can get more output for less money elsewhere, it will. The only reason the company has local staff is because it believes that not having them will ultimately cost more (in quality, in agility, in reputation, whatever. Often this corporate belief is biased/racist).

So, what to do?

Find a company that realizes that the best people are not all magically located in California, and is prepared to pay more so that it gets the benefits of your work rather than one of its competitors. As other commenters have mentioned: in negotiating your salary, point out that you have other options, and if they want you, they need to be willing to out-bid their competitors.

But your current employer has limited scope for this: you really need to move. Once you're employed, the company counts on you being risk-averse enough to stay, even if you're relatively under-paid. The only way to level up is to move.

Good luck!

Tbh, I don't see a problem with this. Throughout my 10+ year career in India I've been paid less than my counterparts in the US, and probably less than a few juniors as well. However the difference has reduced significantly from 10x to 2-3x now.

Just because we all work remote now, I don't feel that there should be parity in our pays. I'd probably be pissed if a counterpart in, say, Bangladesh was being paid much more than me though :-).

Easy solution, get a p.o. box in a higher cost of living location, and use that as your 'business' location, base your pay off that rate. Make sure it's somewhere the company doesn't have physical locations.

Deceptive you say? Well, why do you even need to disclose where you live in the first place? Everything you need can be done remotely, again you can get a forwarding postal mail address from anywhere if they need to drop you snail mail.

It will be interesting to see what happens, as the tools for remote/async work keep getting better, workers get better at doing it, and employers get more used to it. To the extent that distributed teams compete well with single-location teams, wages should tend to even out.

Looks to me like this is already happening for high-end skills. And once those PhDs and 10x folks blaze the trail, it'll get easier for the rest of us.

Where are you based? If you are able to speak English well, the honest answer is that you can be making the same as EU/US based peers. But perhaps not at the same company.

Usually landing a remote position creates significant opportunities. My girlfriend, a talented senior designer, has increased her compensation nearly 5 fold from her previous work situation and now also works from home.

You ultimately get what you negotiate.

The solution is relatively simple, look for a job that doesn't do location based pay. Out of 8 offers I recieved earlier this year, three had location based pay, and I politely declined all three (ok, maybe with a little contempt in my voice) and told them that policy was the reason why. Your not here to change their policies, just move on and tell them why you did (after the new gig is secure.)

Pass some of the workload to the people getting paid more

> 1) cost of living - a lot of my colleagues are in locations where they can buy independent houses which are cheaper than an appartment in the city I live…………

Have you considered moving/transfering to another country ? You list all the problems there and you would benefit from higher income, free healthcare and housing opportunities

Focus on what you can change

Move to where the money is or find a company that pays location independent wages

If a company accepts a flat rate across the nation for their services but then pays you differently based on where you live then you should find new work. I came from an area where software engineers are routinely underpaid compared to their cohorts and the only thing I could do was leave and build up enough experience to work for companies that don't do geopay.

This is likely just a policy from your hr department on employees (or contractors).

You could work around it by starting your own company, have your employer contract with your new company for a given period or piece of work, and pay yourself from there. It moves some of the regulatory work from them to you, but allows you to charge market rates.

Borders bender the rich. It’s simple, it’s dumb

You often get told that you are paid by the value you produce but in reality you are paid by the replacement costs. To some degree they are correlated but companies will always spin this in their favor.

Sometimes there is also a discount based on time zone difference. If somebody is more than 4 time zones way they are harder to deal with.

Switch jobs to one that pays better or move

> felt more like a cog in a machine.

to be fair, you are. regardless of geopay or not.

comparison is the thief of joy. but if you must compare, do so against local companies.

you didn’t mention that the job stunk or was otherwise bad. just that you were paid less. if you don’t think the pay is fair, the course of action here is pretty obvious …

I think about it in terms of how much money I'd have left after all my expenses are covered with my current lifestyle. This includes Healthcare, education and travel opportunities. Once you account for this, the differences are easier to stomach, if still unfair.

Salaries are local.

Outsourced development and manufacturing are premised on this and other local factors such as government incentives and subsidies.

It is possible for contractors to earn equivalent hourly rates but remember then you don't get a monthly salary, and any time off comes out of your pocket.

$60k per year gets you in the 96th percentile here, and you pay ~25% in taxes. If you live here, it's really hard to convince companies to pay you more than that. It would be easy to blame my employer from a richer country, but the actual problem is at home.

Looks like the meme about the price of a bottle of water going around the internet has not reached some of us. There is no “true” price for water. Price is contextual. OP, you are in a contest for which your price is what your price is. Change context. I did.

"If the company is willing to pay me that amount in a different location, why can't it pay me the same here?"

Because capitalism. Or more specifically because your company has very little incentive to pay you more than the market rate in your locale, unless you give them one. You can either try to do that as an individual by basically saying "I'll quit if you don't pay me more" or you can try to do it collectively with your fellow devs by organising and engaging in collective bargaining. Both paths are risky because your local employer might call your bluff (how special are you?) or even if you manage to get a collective bargaining agreement, there is no guarantee the parent company won't take a look at your division, decide that the numbers no longer add up and offshore your job somewhere even cheaper.

"What would the company gain if I work from a different location that they would pay me more?"

Having you, pyrodactyl work from a different locations? Your employer would probably gain nothing. Having a presence and hence a team in another location with a pyrodactyl-like employee doing pyrodactyl-like things. Probably quite a lot. Which is why companies don't generally off shore the entirety of their development teams even though that would be cheaper.

Get so good at something that companies would be willing to pay US/EU rates even remotely.

Because they can.

You're unwilling to move to be paid more, or find a new job (which might be hard, as most companies are acting as a cartel).

Look up BATNA, and decide what you want to do about the situation - don't expect them to do anything about it.

Accept it, while slowly looking for places that aren't hamstrung by location based pay

Price and salary are based on what people are willing to decline. If you’re not willing to quit because of the pay differences and none of your colleagues are either, obviously they are paying you market rates.

Silent duality here is that many engineers are being paid top-level US compensation without actually living there, sometimes 2-10x+ their local counterparts.

Their secret is negotiation. Many US-based large companies and well-funded startups that pay in those top ranges know very well that there are engineers in low cost-of-living countries who are just as productive for their company, so they will compete for those engineers.

The deciding factor in whether each of those individuals actually makes a regional salary or a top level salary (or anywhere in between) is purely based on whether they are willing to refuse lower offers and only accept the same pay the locals in top-paying areas like SF/NY do. Some employers will never budge, but many will, because you're still worth just as much as the locals they pay the same rate.

TL;DR If you've got the skill, only accept the top range of pay and that is what you will make.

Start your own company or become a freelance worker.

Living expenses are an incredibly valid reason.

You wont be able to change their minds on a policy like this.

My advice would be to look around and find another position with higher pay.

I can share how much I'm paying for renting a shithole in London with you if that makes you feel any better :)

It appears you are located in an Asian, South American, African, or perhaps another region. I find it curious that you talk about US/EU compensation, when in fact Poland (which is part of the EU) has Google offices that quite literally pay a half of what Google Dublin pays for the same job, and Dublin in turn is a half or a third of what California pays, if not less.

I too have migrated away from my EU country to another EU country because USA is incredibly racist and getting a job there nowadays is practically impossible.

And I do agree. I've said for quite a while that Cost of Living is a scam to appease poor people. It is very simple: after paying housing, and bills, you are left with more disposable income in a place like Seattle than in a place like Warsaw, Poland. Notice that stuff like iPhone or EC2 instances have more or less the same price globally, so it is funny that these same companies adjust pay regionally, isn't it?

Anyway like someone else mentioned, there's no conspiracy. Companies adjust pay regionally because they can. That's it. I don't understand how more people aren't rioting and burning the streets demanding pay according to value produced... but that's almost communism I suppose?

The market for talent varies by location. Apply for new jobs if you think this is unfair.

why don't you find a counter offer (in other countries if salary is higher), maybe your company will meet you in the middle. It is hard to tell them you are important unless you are leaving.

It is ok. If you think that you cost more, you can apply for another job or migrate where it is paid more. If your employer and you agreed to this amount, it is fair. Pure economics. At another countries it is another costs of living. Difference in cultural aspects doesn’t is not an argument. Anyway communism doesn’t work.

You need to start setting demands, and move on.

Google "super exploitation".

Get another job. Plenty out there.

Move location, that’s what I did.

pay in EU is absolute vomit comapred to US, we are v. poor compared to yanks

Your employer is missing out by not paying by value. I suggest you find a new role at a new company.

Unionise or quit

Get a counteroffer. If your company likes you, they'll match it. If they don't, you can accept the offer and get that amount of money. Basically 0 downside for you.

I think there are a lot of companies that do location-independent pay, so you should look into interviewing at one of those. My impression from a cursory look at what I see on these companies blogs is that they skew very low for someone that lives in New York or San Francisco, but that doesn't seem to be your situation.

Another option is to just move. I think you come out ahead, as pay seems to linearly scale with the cost of living change, but many expenses are fixed. (For example, nobody says "every software engineer should have $1650 for their 401k, $3000 in pocket change, and whatever the average rent is in their city of choice". They say "We aim for $200k in NYC" and if housing is 50% cheaper somewhere else, pay you $100k. That means your 401k, pocket change, etc. scale down proportionally, and that's the part that's unfair. So move to San Francisco!)

You could also find a company that pays more in your desired location. Google's software engineers in Madison, WI probably get paid more than some random startup in Brooklyn, NY. Even if it's location based, you can still get yourself more money.

Finally, if you're contracting, nobody really needs to know what city you live in. For full time employees it's tough to lie about this because of taxes, and of course fraud is a crime. I definitely know of people that claim to live in Pennsylvania but actually live in New York City, for tax reasons. This is fraud and is illegal, but people do do it. Maybe location-based pay tips the scale towards "meh, I can do 5 years in prison with 10% probability". I'd personally avoid going down that road. If you're a contractor, though, nothing stops you from starting a company in a high cost area, billing through the company, and never mentioning (except to tax authorities) where you actually live. Again, I wouldn't recommend this as it sounds like a huge hassle, but everything can be gamed. The upside of contracting is that you're negotiating your compensation several times a year, instead of a handful of times throughout your career. The downside is that if nobody really needs your skills, you make $0 for that period of time, which can be pretty rough.

I think my TLDR is that I'm guessing you don't actually love your job, so you should probably find a different one. That's how you get paid more as a software engineer. Some employers keep their fingers on the pulse of the market and give you raises to keep your compensation within the %-ile that they decided, but 99.99% don't. So, you find a new job every 2 years. That's their fault, not yours. I worked at one of the 0.01% that did keep refreshing comp as the industry landscape changed, without me ever asking, and that was the job I worked at longest.

nobody wants rich remote-working assholes in their town

There's no real winning these on a point by point basis because the entire system of wage labor is set up to separate you from the value you create for owners as much as the market will bear. Employers agree with this openly every time they talk about how this is a market, though they avoid the charged language and obfuscate it by drawing focus to other ideas.

These kind of logical points from employers are not rules or based in any reality except for ones where they simply have power over you to suppress your pay. Hence why these "rules" shift over the years as standards shift in favor or away from workers. These are among myriad tricks for fighting a class war against labor and maximizing extracted value. The best way for workers to beat these pay systems is to apply organized pressure collectively, not for you to have a private conversation with your boss or HR.

> they've told me that I can transfer if i want those pay scales but that's not a possibility for me

So basically you want to be paid more than anyone else in your location? Hard to empathize with this position.