Employees reveal Google has cut the pay of WFH staff

[Anonymous]

From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

[Anonymous]

Anonymous wrote:From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

Yes, but I don't think you're making the point.

If both of those people make 50K, and Person 1 is living in Idaho, they are already being compensated higher because they have a higher spending power.

[Anonymous]

From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

Not quite. You're missing the supply-and-demand issue here. If the employer needs or wants employees who will work in a physical office in NYC, then the supply of those employees is limited to those who live (or are willing to move into) that area. If the same employer is willing to hire remote employees, the supply of those potential employees is much, much higher, since it potentially can include anyone in the world who meets the qualifications for that job. When the person in NYC is competing for the same job as the person in India, wages go down. If an employer can find someone to do similar work for half the pay, then the pay for that job will go down.

[Anonymous]

This is same principle of outsourcing.

[Anonymous]

Anonymous wrote:From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

This is a weird comparison. Are they on the same pay scale? Should the difference in quality be covered by a bonus, or should person 1 be promoted? I don't think all companies would change base salary based on performance differences between employees.

I guess I'd also put it this way. If the company is headquartered in NYC, do you think they should be able to get away with paying employees Idaho wages because that's what the work is "worth"? Do you think they'd be successful in hiring anyone from NYC that way?

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is what many companies are doing. Its not an uncommon practice. PreCovid we had many threads about how much of a pay cut was worth a remote position. I took one and it worked well for me for many years! No surprises here

+1 There was a hug thread about this in late 2020 (I think) when Facebook announced this approach. Even with adjusting for cost of living differences, it’s not like these big tech companies are paying small company crap wages. Why should Google pay SV wages for the employees that opted to move to Idaho?

Because they are doing the same work? I real don’t get the idea that wages should vary based on where you live. Compensation is based on supply and demand for your skills, not what you need or cost of living. Differential pay scales make sense when a job has to be done in a certain location because the company has to adjust to the supply/demand in that location. It makes no sense when a job can be done from anywhere.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is what many companies are doing. Its not an uncommon practice. PreCovid we had many threads about how much of a pay cut was worth a remote position. I took one and it worked well for me for many years! No surprises here

+1 There was a hug thread about this in late 2020 (I think) when Facebook announced this approach. Even with adjusting for cost of living differences, it’s not like these big tech companies are paying small company crap wages. Why should Google pay SV wages for the employees that opted to move to Idaho?

Because wages should be tied to the work and not the location.

You can believe that all you want, but employers disagree.

As an employee, I also disagree. There’s a set salary for jobs, then upward adjustment for location. You can’t take your NYC salary to upstate NY. I’ve moved three times with my firm and every time over 20 years my salary was adjusted (or, the one time I moved to a lower cost market, I didn’t get a raise that year).

This is not new. It’s standard across all industries.

[Anonymous]

This isn’t about earning less working remote - it’s making less working in Idaho than California. Helps keep rich remote workers from driving up LC location housing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

Yes, but I don't think you're making the point.

If both of those people make 50K, and Person 1 is living in Idaho, they are already being compensated higher because they have a higher spending power.

Exactly – as if they were in a different country and were being paid in another, cheaper currency.

If person one is making a better product, they should be paid more than they would if they were making a lesser product. Not necessarily more than a person in another area of the country, especially when having employees in that particular area has benefit to the employer. I imagine employers don’t give you a huge pay increase just for moving to a very expensive city.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:From the employee perspective, if Person 1 is making a better Product A than Person 2, shouldn't Person 1 be paid better than Person 2? Even if Person 1 lives in Idaho and Person 2 lives in NYC?

Yes, but I don't think you're making the point.

If both of those people make 50K, and Person 1 is living in Idaho, they are already being compensated higher because they have a higher spending power.

Exactly – as if they were in a different country and were being paid in another, cheaper currency.

If person one is making a better product, they should be paid more than they would if they were making a lesser product. Not necessarily more than a person in another area of the country, especially when having employees in that particular area has benefit to the employer. I imagine employers don’t give you a huge pay increase just for moving to a very expensive city.

Good companies do give you a salary increase when you move to an expensive city. It’s a cost of living adjustment. And you’d be a fool to move without one.

[Anonymous]

Anonymous wrote:I'm generally in the camp of you should pay people for the job that they are doing, particularly if everyone has the option to work remotely. I do think perhaps it's worth giving a premium to people who come into the office, if coming into the office is something that is valuable to the company. However, if two different people are remote, I'm not sure why salaries would be different.

All that being said, one nuance to consider here is on how locality pay is determined.

1) Some companies adjust pay based on cost of living. In other words, they look at a price index based on a basket of goods. This is typically what people think about when they think of locality pay. This is, for example, how the federal government does locality pay.

2) Some companies adjust pay based on prevailing wages in an area. In other words, they look at the average pay of engineers or financial analysts or lawyers in a region. Then, they adjust pay based on this metric. This is more controversial and it can lead to lower wages than might be expected despite a person living in a high cost of living area.

I can see both sides of this issue overall, but I disagree with the idea of paying a premium to people just because they go to the office. Are they more productive or doing more technical work or better work, which justifies higher pay, or are they just willing to put in face time?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm generally in the camp of you should pay people for the job that they are doing, particularly if everyone has the option to work remotely. I do think perhaps it's worth giving a premium to people who come into the office, if coming into the office is something that is valuable to the company. However, if two different people are remote, I'm not sure why salaries would be different.

All that being said, one nuance to consider here is on how locality pay is determined.

1) Some companies adjust pay based on cost of living. In other words, they look at a price index based on a basket of goods. This is typically what people think about when they think of locality pay. This is, for example, how the federal government does locality pay.

2) Some companies adjust pay based on prevailing wages in an area. In other words, they look at the average pay of engineers or financial analysts or lawyers in a region. Then, they adjust pay based on this metric. This is more controversial and it can lead to lower wages than might be expected despite a person living in a high cost of living area.

I can see both sides of this issue overall, but I disagree with the idea of paying a premium to people just because they go to the office. Are they more productive or doing more technical work or better work, which justifies higher pay, or are they just willing to put in face time?

Believe me, employers wouldn’t pay more for this unless they thought it brought them benefit. most employers are not particularly altruistic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because wages should be tied to the work and not the location.

Federal government wages, both domestic and international, are tied to the location's cost of living. (For foreign service overseas posts, hardship and danger are additional factors.)

GS salaries by location: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2022/general-schedule/
Overseas COLA calculator: https://aoprals.state.gov/Web920/cola.asp

[Anonymous]

If anyone is unhappy with their reduced Google pay now that they live in Montana, they are welcome to find a better paying job in Montana. Google was paying premium wages to accommodate the high local cost of living. People who aren’t facing that high cost of living don’t need the salary premium.

[Anonymous]

There's also the point that Google is a for-profit company. They should be doing what they can to reduce their expenses to invest in R&D and pay shareholders.

So long as they can still retain necessary talent, they absolutely should be recouping savings where they can in employee compensation and real estate.

Employers are not charities.