VMware Cuts Pay for Remote Workers Fleeing Silicon Valley - Bloomberg
https://www.bloomberg.com/news/articles/2020-09-11/vmware-twitter-cut-pay-for-remote-workers-fleeing-bay-area
from earlier thread
Zuckerberg says employees moving out of Silicon Valley may face pay cuts
https://www.cnbc.com/2020/05/21/zuckerberg-50percent-of-facebook-employees-could-be-working-remotely.html
I wonder how many of them saw it coming. Every time I talk to someone who mentions how they can now work from everywhere, when I say as gently as I can that means they can be replaced by someone much cheaper, they seem surprised and it's they first they've thought of it. And maybe the occasional person has a pained look that says, "Yeah, I know."
> that means they can be replaced by someone much cheaper
In some cases, much, MUCH cheaper. Indian and Vietnamese workers, already having some English language skills, will eat the remote worker market alive. And it gets around the US visa problems, too.
Also, foreign remote workers would likely be easy to classify as subcontractors, which makes them waaaay easier to deal with than employees.
>>Indian and Vietnamese
If it's someone who I think is emotionally robust, when they say, "That means I could work from Tahoe," I say, "You realize that means your job can be done from Romania or the Philippines then, right?" I'm not trying to be a downer, but trying to get them to start thinking about what it is they bring to the job that someone from Romania could not (local knowledge for example) or that they bring that is worth 2X per day what a Romanian gets.
I pick Romania, because they seem to have high levels of both English and programming skills. One friend who used to hire California contractors now works almost entirely with Romanians.
Another one.
> your job can be done from Romania
If companies are willing to provide incentives to move out of HCOL areas then the flip side is they have also directed their HR departments to give preference to potential remote worker hires that already live in LCOL areas 'cause it is cheaper.
Stripe will paying employees a bonus to leave Seattle, New York and San Francsico, but it's also cutting their pay
https://www.cnn.com/2020/09/16/business/stripe-employees-new-cities/index.html
>>>Indian and Vietnamese
Baltic states a great spot, exceptional English and low cost. Min wage in Latvia is around $500 a month.
Most of these pay cuts are on the order of 10% to 20%. Frankly, that's still a bargain for the employee. There are very few places in the country that have 90% the COL of the Bay Area.
It makes me wonder what it means for remote workers in Paris, Geneva, Zurich, Copenhagen and other extremely expensive cities. San Fran and Seattle don't even appear on any Ten Most Expensive lists that I find (New York does though, which maps with the rumor mill - my niece was all excited because they found a "cheap" two-bedroom apt in Brooklyn for only $4500/mo).
Knives coming out for our labor market.
How the rise in remote work during Covid-19 could transform developing countries - Vox
https://www.vox.com/future-perfect/21445830/work-from-home-covid-19-offshoring
Staff who work from home after pandemic 'should pay more tax'
https://www.theguardian.com/business/2020/nov/11/staff-who-work-from-home-after-pandemic-should-pay-more-tax
>https://www.theguardian.com/business/2020/nov/11/staff-who-work-from-home-after-pandemic-should-pay-more-tax
Nuts. I've been able to work the past 7 months precisely because I do work from home, which about 8 million people have been given 80% of their wages from the Government. They're suggested I should pay more tax for the privilege!
My regional government had a consultation on the "digital economy" right before the pandemic. I suggested there's a middle ground where there could be neighbourhood offices within walking distance that gives people space away from home but has the environmental benefits. Seems like the majority don't mind working from home anyway, providing they have the space and peace for it.
These types of things always irk me.
The pay cut for remote workers totally makes sense - if I'm a business that used to require you to live in one of the costliest cities in the world and now I'm saying you can live anywhere, if you choose to move somewhere cheap, why would I pay you Palo Alto wages?
But to institute tax policy that discourages work from home is just so wrong. In fact, it is utterly backwards if you care about things like carbon footprint, land use, highway congestion, air pollution and any other number of actual problems.
The problem in the US is that wages are the bottom are too low and this is due to a lot of policies aimed at holding wages down or, more often, aimed at helping the investor class regardless of the impact on the working class. We have had a bias for 40 years against inflation, for example, which favors investors, but generally hurts workers as it tends to increase unemployment and push wages down.
Instead of just paying people at the bottom more, we have a zillion policies that effectively amount to subsidies to businesses and all consumers, including the very rich, by propping up businesses with subsidies (such as food stamps, Medicare) and keeping the cost of dining out and buying all manner of crap cheap for rich and poor alike.
In the words of Nick Hanauer, "We have a technology to eradicate poverty. It's called money." Just pay people enough to make it worth it for them to leave their homes.
Bay Area applicants flood program that pays them $10,000 to leave California
https://www.sfgate.com/living-in-sf/article/San-Franciscans-are-jumping-at-an-offer-of-10k-15591762.php
Thousands apply to be a Finn for 90 days in migration scheme | Finland | The Guardian
https://www.theguardian.com/world/2020/dec/25/thousands-apply-to-be-a-finn-for-90-days-in-migration-scheme
This will happen.
Remote work risks exploiting workers in low-income countries — Quartz Africa
https://qz.com/africa/2053741/remote-work-risks-exploiting-workers-in-low-income-countries/
> This will happen.
Agree.
Never underestimate greed. Never underestimate the greed of corporations.
Here Are The Winners of Remote Work - The New York Times
https://www.nytimes.com/2021/08/31/upshot/remote-work.html
>Never underestimate greed. Never underestimate the greed of corporations.
As a business owner, though I don't have remote people and don't plan to, I don't see this move as greed but a simple business decision.
If I don't need someone local, they don't need to be in my city, or my state. If they don't need to be in my state, they probably don't need to be in my country. What's the difference? Remote work is remote work, where ever it happens.
If a company can get similar quantity and quality of work done for considerable savings, it seems like good business sense to me.
Ditto what Dras said. With the exception of one stellar perl programmer here in thecore, I switched to a VN programmer for some of my content management scripts. Cheaper, easier to deal with, and ZERO 1099s to the gov.
The real talent is the manager who develops the skill of managing a cadre of remote workers. It takes a different skillset than in-person managing.
Can you copy and paste the "Winners of remote work" article? I keep getting told I've read all my articles for the month. And the month just started.
Short version - it's not just that people in low-cost areas are paid less
- natives of low-cost areas are paid less than natives of high-cost areas who move to low-cost areas
- many low-cost areas are not low-cost if you live in a major city in a nice home with nice internet and all that.
QuoteThe Winners of Remote Work
There are already examples of how gains are captured by the few and not the many.
Who wins and who loses when companies can hire from anywhere?
Some employees and freelancers who can work remotely will have vastly expanded opportunities and the possibility of significant increases in pay, but remote workers in general figure to face more competition and have a higher dependence on luck.
One thing that seems unavoidable, research suggests, is an intensification of inequality.
In his 1981 paper, "The Economics of Superstars," Sherwin Rosen described the impact of recording and broadcasting on the incomes of athletes and entertainers. As technology enabled individuals with specialized skills to reach a giant market — one hour of work in a single location could suddenly reach many people across the country — fewer stars captured more of the rewards.
Professor Rosen expected that over time many other professions would follow a similar pattern. A teacher's income, for example, was traditionally limited by the number of students who could fit into one classroom. But today on Udemy, an online learning platform, teachers like Chris Haroun have earned millions from courses they created, especially after Covid-19 lockdown pushed enrollments on the platform up by 425 percent. The vast majority of teachers on Udemy don't come close to Mr. Haroun's earnings, however, resulting in an extremely unequal distribution of income between superstar teachers and everybody else.
A meaningful shift in the distribution of income can also be seen in platforms where remote instruction is more similar to traditional teaching. On Outschool, an online marketplace for virtual classes for children, hundreds of teachers earn more than $100,000 a year, and dozens earn over $230,000. But most Outschool teachers earn far less, partly because they treat online teaching as a hobby or side hustle, and partly because they haven't yet figured out how to attract students.
ADVERTISEMENT
Continue reading the main story
The adoption of remote work is also affecting more traditional institutions. Scott Galloway, a professor at N.Y.U.'s Stern School of Business, told me in April, "Because all my classes are remote now, the school asked me, 'Can you go from 160 — dictated by the size of Stern's largest classroom — to 280?' That's 120 fewer seats for the other marketing professors to fight over."
Similar dynamics can be seen in professions that were assumed to be inherently "in-person." During the lockdowns, most fitness instructors were out of work. But a handful were thriving — especially those who worked for Peloton. By the end of 2020, Peloton had about four million members — equal to the number of gym patrons in New York State. Unlike New York's fitness industry, Peloton did not employ 86,000 people in a single state.
Instead, the company's millions of members were served by several dozen instructors who could live anywhere they liked. While most fitness instructors could not work at all, some Peloton instructors earned more than $500,000 — more than 12 times the median salary of their peers.
Sign up for The Upshot Newsletter Analysis that explains politics, policy and everyday life, with an emphasis on data and charts. Get it sent to your inbox.
When a market expands, the benefits tend not to accrue equally to all participants, a dynamic true in fields beyond teaching and instruction. As early as 1995, the economists Robert H. Frank and Philip J. Cook observed that payoff structures previously common in entertainment were becoming more prevalent in a variety of other professions. Some lawyers, doctors, consultants, bankers and managers were making more than ever, while fewer of their colleagues occupied middle-income jobs.
The two economists attributed these changes to "the revolution in information processing and transmission," which provides "increasing leverage for the talents of those who occupy top positions and correspondingly less room for others."
This trend continued into the 21st century. According to a 2020 study by the economists David Autor, Claudia Goldin and Lawrence F. Katz, most of the increase in income inequality over the past two decades occurred "within, rather than between, education groups." Some college-educated employees — particularly those with advanced degrees — earned more than ever while most of their peers stood in place or retreated. Technology contributed to this increase by enabling companies to produce more and reach more customers while depending on fewer but more specialized employees.
Significant as it was, technology's impact on many professions was constrained by geography. When most companies hired only employees who lived within commuting distance of the office, the size of the labor market was capped. This put a ceiling on the employment options and earning capacity of employees with the most specialized, in-demand skills. It also put a floor beneath other professionals who enjoyed a decent salary and relative job security by virtue of living within commuting distance to a central business district or office park.
The constraints of geography are loosened now that Silicon Valley and other industries are embracing remote work — gradually, then suddenly. The Economist recently analyzed job listings on Hacker News, a site popular with programmers. It found the share of jobs mentioning "remote" reached 75 percent in 2021, up from 35 percent pre-Covid and 13 percent a decade earlier.
How will this affect the average tech worker?
There are some early indications. In June, Google told rank-and-file employees it would reduce the pay of those who choose to work remotely or move farther from the office. Avoiding the office saves employees money — in commuting costs, for example — but as the economist Austan Goolsbee recently wrote for The New York Times, companies in the last 40 years have usually found a way to claw back any potential gains for workers.
For most tech workers, remote work means competing in a much larger pool of equally qualified candidates, many of whom are based in lower-income cities and countries.
Should this worry the most in-demand engineers and product management? Probably not. For them, working remotely means competing for the highest-paying jobs from a larger number of companies.
But even many highly qualified and specialized employees have something to worry about.
As Enrico Moretti pointed out in "The New Geography of Jobs," hiring "is very similar to dating." Access to more potential candidates in a bigger pool of people increases the chance of finding an ideal match. Matching specialized talent to specific jobs is a major reason that innovation, productivity and salaries are higher in large cities.
ADVERTISEMENT
Continue reading the main story
But the biggest markets don't just offer the biggest rewards. They also tend to distribute these rewards unevenly and, often, unpredictably. Income inequality grows with city size.
And while access to more candidates increases the odds of an ideal match, it also introduces more "noise" into the selection process, leaving a bigger role for chance events in determining which candidates end up earning more throughout their career. The same dynamics figure to intensify as employees join a remote labor market that is orders of magnitude larger than any city on earth.
During the deep and sudden recession last year brought about by lockdowns, those who could work remotely kept their jobs or quickly found new ones. A job that could be done from anywhere was a source of comfort and security.
But in the long term, remote work's promise is more ambivalent. It offers more flexibility, accommodating people who would otherwise give up office work altogether. For many, it offers access to better economic opportunities, regardless of location. But for some it will also introduce more competition. Ultimately, remote work ushers some freelancers and employees into a global arena that seems to promise a higher ceiling, but a lower floor as well.
Quote from: rcjordan on September 01, 2021, 01:10:11 PM
The real talent is the manager who develops the skill of managing a cadre of remote workers. It takes a different skillset than in-person managing.
So much this. It's hard to stay with a team of people in such different time zones. I've heard of some really good setups with one manager keeping things running along for an entire office.
"The post-Covid-19 hybrid model of working will present challenges to everyone. Managers will bear the brunt of the change."
Leveling The Playing Field: Managing A Hybrid Team
https://www.forbes.com/sites/forbestechcouncil/2021/09/03/leveling-the-playing-fieldmanaging-a-hybrid-team/
related:
New locality-pay adjustments will impact thousands of federal workers
The Federal Salary Council is taking steps to add and adjust pay locality for some federal workers. The council has accepted recommendations from a working group to add Fresno, California, and Spokane, Washington, as new pay locality areas, which would impact about 11,400 employees. But before those new pay localities can become official, the president's pay agent, comprised of leaders from the Labor Department, Office of Management and Budget and Office of Personnel Management, must finalize the recommendation. There are currently 53 pay localities for feds.
https://federalnewsnetwork.com/federal-newscast/2022/08/new-locality-pay-adjustments-will-impact-thousands-of-federal-workers/
Somewhere in th3core, ergophobe mentioned that remote work would soon go offshore....
Tech firms are increasingly hiring in South and Central America because remote hires there often accept lower pay than in the US but have similar time zones
Nearshoring Push Fuels Tech Job Demand in Latin America - Bloomberg
https://www.bloomberg.com/news/articles/2023-05-10/nearshoring-push-fuels-tech-job-demand-in-latin-america
That wasn't so much a prescient prediction as relating something I was already seeing.
Years ago I remember arguing with a friend that the best way to secure the US border would be to raise the living standard from Mexico south. I had no idea that by 2023 it would be even more important to raise wages there for the reason you mention above.
UPS to cut 12,000 non-union jobs and demand that employees show up at the office 5 days per week
https://www.nytimes.com/2024/01/30/business/ups-layoffs-rising-wages-union-contract.html
There's no assertion that WFH is less productive or they are worse employees. But you gotta cut 12,000 managerial positions, positions the CEO says "are never coming back" because a "change in the way we work," so how do you make those tough decisions? Start by testing their job commitment by whether or not they are willing to be physically present. I wonder how many of the 12,000 they'll cut by that criterion alone.