Then they need to raise the amount enough to attract more people. They can pay different people different amounts, but the amount should be based on what they need to attract them and not take location into account. Eg if the higher amount raises the number of applicants in the lower cost of living area too, then they shouldn’t go “oh, but you’re in the lower cost area so your offer is lower”
Ie raising the offer raises the applicants, where those applicants are should not matter.
> They can pay different people different amounts, but the amount should be based on what they need to attract them and not take location into account.
But what if you need to pay someone in topeka less to attract them than someone in NYC?
Specifically, if we think about the idea of a market, and assume some jobs won't be remote, the dev in NYC will have a larger market (remote jobs + onsite jobs in NYC) than the topeka dev (remote jobs + onsite jobs in topeka). This is actually the same way things are now.
What is so unethical about a company choosing to pay you (in the case of facebook, well above) market rate in the market you choose to reside in?
The only thing I’m arguing is that if my location doesn’t matter to the job, then the location I’m in shouldn’t matter to the salary equation: only what you’re willing to pay for my skills and what I’m willing to accept. Tax or other legal issues aside, once I’m employed remotely, it shouldn’t matter to you if I then decide to leave my expensive NYC apartment to live for a fraction of the cost in some rural town (assuming I have adequate internet etc). The employer shouldn’t then say well your cost of living is now lower, so we will pay lower. I’m still the same person providing the same value.
If the company wants to save money, then why were they willing to pay more just because I lived in a higher cost of living area, rather than looking for people in the lower cost of living areas to begin with?
Employers pay more when there are more competitors in the same labor market paying more. Right now that depends on where you live because most positions are not remote and candidates already relocated looking for valuable experience and better offers. If that changes, then Bay Area and New York offers might no longer be much higher (maybe they won't even cover the cost of living here).
I mean, sure, that sucks for people in the local labour market, but if you cannot find work that covers your cost of living, then you either have to change your work or lower your cost of living. This is the same in any type of work, in any location. For example, you might make enough money running a small town bakery, then big office opens up, local cost of living rises (like it has in San Francisco, for example) and suddenly you can’t sustain yourself anymore. You either have to do something else or move somewhere else.
My point isn’t that things don’t have an effect, just that companies want to embrace remote, that location shouldn’t be coupled to compensation, outside of implicitly due to locations effect on what an employee would accept. The employee can then make a decision on their own worth and values and choose whether they would rather do their location-non-specific work from a high cost place (that presumably has other benefits[1]) or if they would rather move to a low cost place. This shouldn’t matter to the company and shouldn’t have any impact on how they value the employee.
[1] If there is no benefit to living in a high cost location, for a given individual, then its not exactly smart ir prudent for them to stay there and keeping the prices high (due to higher demand) isn’t benefiting anyone. (Proximity to friends and family is, of course, part of the equation). I can’t expect my career of choice to pay me more just because of my personal choices or preferences, though. Why should one employee subsidize another employees lifestyle?
> This shouldn’t matter to the company and shouldn’t have any impact on how they value the employee.
Your mistake is thinking that compensation is solely based on how much they value the employee. Companies only need to pay enough to outbid the competition, and the amount of competition for workers is a lot higher some places than others.
Think of it in basic supply and demand terms - the amount that a company "values" an employee only reflects the demand curve; the other half the equation is the supply curve, i.e. how much a company has to pay to beat out the competition and persuade employees to work for them because all the other options are worse. The supply curves are shifted right in LCOL areas, which drives the equilibrium prices down.
Ie raising the offer raises the applicants, where those applicants are should not matter.