Fantastically Disruptive, But Extremely Difficult to Copy
June 5, 2023 6:08 AM Subscribe
Paying employees equally no matter where they live is a reflection of today’s internet labor market—a global landscape of suppliers and buyers who connect as if they were on the same street. “There’s a lively debate in big companies about flat salaries across geography, and, of course, I think everyone should do it,” says Rasch. “People often counter the policy with points about the different costs of living, but put simply, is it fair to pay someone who lives in a poorer part of town a lower salary? No.” from The Company Where Every Employee Earns the Same [Wired; ungated]
I work for a big company (Hearst) that just unionized, and equal rates of pay for employees working in and out of NYC was a big sticking point.
Ultimately we lost that fight -- though we got the rates closer than they were. But it's a little galling to know that I'm considered worth less because I don't live in the city. The magazines we all work on out here don't cost less...
posted by heyitsgogi at 6:28 AM on June 5, 2023 [6 favorites]
Ultimately we lost that fight -- though we got the rates closer than they were. But it's a little galling to know that I'm considered worth less because I don't live in the city. The magazines we all work on out here don't cost less...
posted by heyitsgogi at 6:28 AM on June 5, 2023 [6 favorites]
If capital can move freely like this, so should labor.
posted by lalochezia at 6:30 AM on June 5, 2023 [16 favorites]
posted by lalochezia at 6:30 AM on June 5, 2023 [16 favorites]
If capital can move freely like this, so should labor.
That, fundamentally, is the issue at hand. If capital is permitted to exploit regional inequalities, it will do its level best to use that as a way to drive everyone's salaries down.
posted by mhoye at 6:32 AM on June 5, 2023 [28 favorites]
That, fundamentally, is the issue at hand. If capital is permitted to exploit regional inequalities, it will do its level best to use that as a way to drive everyone's salaries down.
posted by mhoye at 6:32 AM on June 5, 2023 [28 favorites]
Lost is the discussion is who benefits from locating offices and hiring workers in a city where rent and cost of living are higher. Why would anyone locate in an expensive city?
Employees probably benefit because they are able to find employers for whom their skills are more valuable, and with whom they can command a higher wage. If you are a specialized technician in a small town, there will only be 1 or 2 employers, and that can drive down wages. That reads as a cost to employers, but they benefit from attracting employees who are better matches and doing so more quickly. Employers are reluctant to admit that they usually have no idea how much value particular employees provide, and that they can't equalize that quality factor. Employers often have many non-labor-market benefits to locating offices in a city, such as being close to suppliers and customers. Even if all a firm's workers don't really need to be in the city, there are probably benefits to having the entity in one physical location. Some of that increase in productivity should go to the worker.
Think of it this way: if the business really needed an office in a remote Alaskan location because there were benefits above and beyond the transportable work product, they would need to provide a stipend to cover the increased cost of living. It's the same if they need their entire workforce in NYC. Yes, the tax accountant could live in Syracuse at a lower cost of living for about the same work product, but if the management thinks that there is higher productivity in a central office, then they need to pay more.
posted by a robot made out of meat at 6:45 AM on June 5, 2023 [4 favorites]
Employees probably benefit because they are able to find employers for whom their skills are more valuable, and with whom they can command a higher wage. If you are a specialized technician in a small town, there will only be 1 or 2 employers, and that can drive down wages. That reads as a cost to employers, but they benefit from attracting employees who are better matches and doing so more quickly. Employers are reluctant to admit that they usually have no idea how much value particular employees provide, and that they can't equalize that quality factor. Employers often have many non-labor-market benefits to locating offices in a city, such as being close to suppliers and customers. Even if all a firm's workers don't really need to be in the city, there are probably benefits to having the entity in one physical location. Some of that increase in productivity should go to the worker.
Think of it this way: if the business really needed an office in a remote Alaskan location because there were benefits above and beyond the transportable work product, they would need to provide a stipend to cover the increased cost of living. It's the same if they need their entire workforce in NYC. Yes, the tax accountant could live in Syracuse at a lower cost of living for about the same work product, but if the management thinks that there is higher productivity in a central office, then they need to pay more.
posted by a robot made out of meat at 6:45 AM on June 5, 2023 [4 favorites]
Geographic inequities always seemed unfair to me. My partner's previous company paid him significantly less than his same-role workers in San Francisco even though we live in a major, not inexpensive city ourselves.
I also personally struggle with what seems like pay inequity at my organization. I see people who do much less work or are less good at their jobs than I am in mine, who I happen to know make more than me and it's so demoralizing. I know what my boss makes because we're a non-profit and she's on the 990, and for someone who is so bad at their job to make 50% more than me... it's galling every time. Whenever I get frustrated about something my brain tacks on "and they make more than me!"
We recently went through a salary benchmarking process with an outside HR consultant, and some folks were given "equity increases" because they were woefully underpaid. The process took into account role and geography and also assessed equity across gender and race/ethnicity lines. In some ways I think it was a good thing, but it also felt ultimately flawed.
First, it limited the benchmarking to other similar kinds of nonprofits and did not include for-profit salaries for comparison. Non-profits are often more gender and racially diverse than for-profit companies which is among the reasons that they pay less, so you're failing to address what I think is an important part of salary equity. Second, when you make it role-based you also bake in inequities across departments (staff in our IT/development roles make significantly more than me because I'm in marketing, even though I have 20 years of experience in the kind of work that I do and it is a critical part of our work. And surely there's a gendered component to why tech roles get higher salaries than marketing?) It also didn't seem to address inequities about who gets promoted or hired at which level - we assessed diversity but I didn't see any analysis about what levels of roles BIPOC folks are in - i.e. the higher up you go, the more white the staff are.
posted by misskaz at 6:51 AM on June 5, 2023 [7 favorites]
I also personally struggle with what seems like pay inequity at my organization. I see people who do much less work or are less good at their jobs than I am in mine, who I happen to know make more than me and it's so demoralizing. I know what my boss makes because we're a non-profit and she's on the 990, and for someone who is so bad at their job to make 50% more than me... it's galling every time. Whenever I get frustrated about something my brain tacks on "and they make more than me!"
We recently went through a salary benchmarking process with an outside HR consultant, and some folks were given "equity increases" because they were woefully underpaid. The process took into account role and geography and also assessed equity across gender and race/ethnicity lines. In some ways I think it was a good thing, but it also felt ultimately flawed.
First, it limited the benchmarking to other similar kinds of nonprofits and did not include for-profit salaries for comparison. Non-profits are often more gender and racially diverse than for-profit companies which is among the reasons that they pay less, so you're failing to address what I think is an important part of salary equity. Second, when you make it role-based you also bake in inequities across departments (staff in our IT/development roles make significantly more than me because I'm in marketing, even though I have 20 years of experience in the kind of work that I do and it is a critical part of our work. And surely there's a gendered component to why tech roles get higher salaries than marketing?) It also didn't seem to address inequities about who gets promoted or hired at which level - we assessed diversity but I didn't see any analysis about what levels of roles BIPOC folks are in - i.e. the higher up you go, the more white the staff are.
posted by misskaz at 6:51 AM on June 5, 2023 [7 favorites]
Talk about burying the lead: The article spends a lot of time on completely flat pay structures, where the CEO and an admin earn the same. That's a bit more radical than not having geography based incentives. It's one way to handle outrageous c-level salary inequities, but I think of pay equity as "the same pay for the same work" that I'm having trouble even wrapping my head around this idea.
Employees who work in expensive areas get a pay hike. If you transfer from Indiana to the Bay Area your salary goes up, and vice versa if you go the other direction. Fully remote employees IIUC just get base pay and live where they want; the salary adjustment kicks in if we say "As part of your job duties, you are tied to this site and must be there in person when we ask."
This doesn't seem wildly unfair? I can see the argument to trash the difference, but I'm not sure it helps employees?
posted by mark k at 7:02 AM on June 5, 2023 [8 favorites]
“In traditional companies, you need this elaborate plan for negotiating a raise, and sometimes you spend more time making that than actually doing the work,” says IcartWhat? Asking for a raise is stressful but that seems wildly hyperbolic.
Although the market for remote jobs is momentarily shrinking, the mass migration of workers during the Covid-19 pandemic has dramatically weakened the case for location-based pay.My company requires people onsite: We do things like lab work and small scale manufacturing. We are in the SF Bay Area. We also have sites in places where the cost of living is much lower. (Not rural Indiana, but imagine something like that.)
Employees who work in expensive areas get a pay hike. If you transfer from Indiana to the Bay Area your salary goes up, and vice versa if you go the other direction. Fully remote employees IIUC just get base pay and live where they want; the salary adjustment kicks in if we say "As part of your job duties, you are tied to this site and must be there in person when we ask."
This doesn't seem wildly unfair? I can see the argument to trash the difference, but I'm not sure it helps employees?
posted by mark k at 7:02 AM on June 5, 2023 [8 favorites]
There are so many parts to this, but it's way bigger than just what companies pay depending on where you live, or even if the pay structure of a company is completely flat. This needs to be a part of a much much MUCH larger conversation about cost of living in different places and landlord price gouging and any number of factors which make it so blatant that people living in some cities need huge pay just to survive that would allow them to thrive if they moved an hour or two away.
The whole wealth inequity discussion needs to look at our cities and how they function and not just at corporation pay, because as long as living in SF costs 10x what living someplace else does, it just bakes in the inequality.
posted by hippybear at 7:09 AM on June 5, 2023 [4 favorites]
The whole wealth inequity discussion needs to look at our cities and how they function and not just at corporation pay, because as long as living in SF costs 10x what living someplace else does, it just bakes in the inequality.
posted by hippybear at 7:09 AM on June 5, 2023 [4 favorites]
Employees who work in expensive areas get a pay hike.
This used to be the case with many government jobs in Canada (maybe it still is, I don't know). If your role required you to be in a place with a high cost of living, then there was a cost of living adjustment on your pay. Which is logical, especially for roles where you are potentially sent anywhere in the country (like the military or the RCMP).
I think in the age of remote work the main sticking point will be whether your role actually requires you to be in that city or not. This is already the main battleground for organizations trying to get their employees back in the office since the work from home mandates have ended, I imagine adding in changes to compensation will only raise the tension in the (virtual) room
posted by selenized at 7:18 AM on June 5, 2023 [3 favorites]
This used to be the case with many government jobs in Canada (maybe it still is, I don't know). If your role required you to be in a place with a high cost of living, then there was a cost of living adjustment on your pay. Which is logical, especially for roles where you are potentially sent anywhere in the country (like the military or the RCMP).
I think in the age of remote work the main sticking point will be whether your role actually requires you to be in that city or not. This is already the main battleground for organizations trying to get their employees back in the office since the work from home mandates have ended, I imagine adding in changes to compensation will only raise the tension in the (virtual) room
posted by selenized at 7:18 AM on June 5, 2023 [3 favorites]
Why would anyone locate in an expensive city?
I can't tell if this question is about employees or businesses? But for employees and company owners both, the reality is that expensive areas usually (but not always) offer a high quality of life. (And, most of the cost of expensive areas is the high cost of housing, but a fairly large percentage of people living in those areas were able to buy houses years ago when housing was cheap, so they are immune from the escalating costs.)
Fully remote employees IIUC just get base pay and live where they want; the salary adjustment kicks in if we say "As part of your job duties, you are tied to this site and must be there in person when we ask."
This seems reasonable to me (and is how things are being done where I work); the idea of adjusting remote staff's wages based on location is what seems suspect to me. Versus, if the position requires that you live in San Francisco, the salary should be tied to the local market and cost of living, so that you can actually afford to live there. In the article, a few of the people profiled used their new higher salaries to move to more expensive locations (like the guy who moved to Medellin).
The article is about a much more radical approach, with a completely flat salary structure across international geographies. (Though I wonder if there are different non-salary compensation structures for some employees, like being granted stock or whatever.) I like that in principle but would like to see what it would mean in different kinds of companies. Even without going as far as a completely flat salary structure, anything that both reduces the spread between CEOs and employees, and eliminates gender disparities in pay, seems very worthwhile to me.
posted by Dip Flash at 7:18 AM on June 5, 2023 [3 favorites]
I can't tell if this question is about employees or businesses? But for employees and company owners both, the reality is that expensive areas usually (but not always) offer a high quality of life. (And, most of the cost of expensive areas is the high cost of housing, but a fairly large percentage of people living in those areas were able to buy houses years ago when housing was cheap, so they are immune from the escalating costs.)
Fully remote employees IIUC just get base pay and live where they want; the salary adjustment kicks in if we say "As part of your job duties, you are tied to this site and must be there in person when we ask."
This seems reasonable to me (and is how things are being done where I work); the idea of adjusting remote staff's wages based on location is what seems suspect to me. Versus, if the position requires that you live in San Francisco, the salary should be tied to the local market and cost of living, so that you can actually afford to live there. In the article, a few of the people profiled used their new higher salaries to move to more expensive locations (like the guy who moved to Medellin).
The article is about a much more radical approach, with a completely flat salary structure across international geographies. (Though I wonder if there are different non-salary compensation structures for some employees, like being granted stock or whatever.) I like that in principle but would like to see what it would mean in different kinds of companies. Even without going as far as a completely flat salary structure, anything that both reduces the spread between CEOs and employees, and eliminates gender disparities in pay, seems very worthwhile to me.
posted by Dip Flash at 7:18 AM on June 5, 2023 [3 favorites]
"Cost of living" is mostly housing, isn't it? I haven't noticed that groceries or plumbers are remarkably cheaper in smaller places in my many moves.
posted by emjaybee at 7:21 AM on June 5, 2023 [3 favorites]
posted by emjaybee at 7:21 AM on June 5, 2023 [3 favorites]
Here's a flat pay structure from before covid times, where housing is fairly affordable, everyone's located in the same place, and it's mostly in-person work, if anyone wants to compare that with more transparancy.
posted by ambrosen at 7:25 AM on June 5, 2023 [2 favorites]
posted by ambrosen at 7:25 AM on June 5, 2023 [2 favorites]
Interesting. It seems like problem they want to solve is geographic pay inequality. This structure incentives living in poor countries - unclear if that benefits people from those countries primarily or digital nomads from rich countries moving to poor countries.
Is the CEO full compensation package the same as the lowest status worker? If so, that's amazing.
But is there really no incentive for staying at the company through raises over time? When I worked at the collective food store, we had a flat pay structure in the sense that everyone was on the same pay scale and we moved through pre-determined pay steps based only on seniority. If you want a job to be sustainable over time, it needs to somehow incentivize longevity.
posted by latkes at 7:28 AM on June 5, 2023 [6 favorites]
Is the CEO full compensation package the same as the lowest status worker? If so, that's amazing.
But is there really no incentive for staying at the company through raises over time? When I worked at the collective food store, we had a flat pay structure in the sense that everyone was on the same pay scale and we moved through pre-determined pay steps based only on seniority. If you want a job to be sustainable over time, it needs to somehow incentivize longevity.
posted by latkes at 7:28 AM on June 5, 2023 [6 favorites]
I do think publicly transparent pay structure that is at minimum defined by your job title and ideally defined only by seniority, along with structures that facilitate people moving between positions (if the pay is different for different positions) is the only way to address gendered and racist pay inequality at work. Usually that's achieved through a union contract.
posted by latkes at 7:30 AM on June 5, 2023 [2 favorites]
posted by latkes at 7:30 AM on June 5, 2023 [2 favorites]
This structure incentives living in poor countries - unclear if that benefits people from those countries primarily or digital nomads from rich countries moving to poor countries.
That's the real story.
posted by grumpybear69 at 7:41 AM on June 5, 2023 [2 favorites]
That's the real story.
posted by grumpybear69 at 7:41 AM on June 5, 2023 [2 favorites]
But is there really no incentive for staying at the company through raises over time? When I worked at the collective food store, we had a flat pay structure in the sense that everyone was on the same pay scale and we moved through pre-determined pay steps based only on seniority. If you want a job to be sustainable over time, it needs to somehow incentivize longevity.
One of the people interviewed in the article described periodic substantial raises, and appreciated how this was open and shared:
When SafetyWing hits a pre-agreed revenue milestone, all employees see the same pay increase hit their bank account.
Salazar, who hates pay negotiation and would rather leave a company than try to drive up his salary, has experienced several company-wide raises at SafetyWing. “It’s been a considerable amount—something like 10 percent each time,” he says. “Celebrating that success with other colleagues, rather than behind closed doors with people outside the company, is very motivating.”
posted by Dip Flash at 7:46 AM on June 5, 2023 [7 favorites]
One of the people interviewed in the article described periodic substantial raises, and appreciated how this was open and shared:
When SafetyWing hits a pre-agreed revenue milestone, all employees see the same pay increase hit their bank account.
Salazar, who hates pay negotiation and would rather leave a company than try to drive up his salary, has experienced several company-wide raises at SafetyWing. “It’s been a considerable amount—something like 10 percent each time,” he says. “Celebrating that success with other colleagues, rather than behind closed doors with people outside the company, is very motivating.”
posted by Dip Flash at 7:46 AM on June 5, 2023 [7 favorites]
The article reeks of bullshit and Glassdoor reports confirm
https://www.glassdoor.com/Salary/SafetyWing-Salaries-E4439251.htm
Every reported salary is enough money to live comfortably in a major city in a "rich" country, but the executives still make 4x as much as the line staffers.
This entire story is just an advertisement. SafetyWing sells services to employers who encourage employees to be "digital nomads" (illegal immigrants sitting in expensive cafes) and they worked over a gullible journalist to make sure that their intended audience sees some writing about how you can get away with paying less by "employing people in 68 countries"
posted by your postings may, in fact, be signed at 7:55 AM on June 5, 2023 [18 favorites]
https://www.glassdoor.com/Salary/SafetyWing-Salaries-E4439251.htm
Every reported salary is enough money to live comfortably in a major city in a "rich" country, but the executives still make 4x as much as the line staffers.
This entire story is just an advertisement. SafetyWing sells services to employers who encourage employees to be "digital nomads" (illegal immigrants sitting in expensive cafes) and they worked over a gullible journalist to make sure that their intended audience sees some writing about how you can get away with paying less by "employing people in 68 countries"
posted by your postings may, in fact, be signed at 7:55 AM on June 5, 2023 [18 favorites]
I'd like to think my 30 years of experience are worth more than the college degree and one internship my junior employee brings to the table. A totally flat compensation structure works fine for a small company where everyone is, essentially, the head of their department. It doesn't scale well to a corporation.
I also have a problem with same pay rate for remote and in-person workers. As all the RTO protesting makes clear, people see value in being able to work remotely. It doesn't mean we should pay exploitative salaries to remote workers, but if we want certain employees in the office, we should compensate them for the time and cost it takes them to get there. It costs time and money to commute, if the company is requesting that it should be compensated.
posted by Narrow Harbor at 7:59 AM on June 5, 2023 [3 favorites]
I also have a problem with same pay rate for remote and in-person workers. As all the RTO protesting makes clear, people see value in being able to work remotely. It doesn't mean we should pay exploitative salaries to remote workers, but if we want certain employees in the office, we should compensate them for the time and cost it takes them to get there. It costs time and money to commute, if the company is requesting that it should be compensated.
posted by Narrow Harbor at 7:59 AM on June 5, 2023 [3 favorites]
It costs time and money to commute, if the company is requesting that it should be compensated.
I also support a new national labor law that requires employers to pay me from the time I leave my door of my house to the time I return along with fuel and other associated costs!
posted by hippybear at 8:05 AM on June 5, 2023 [15 favorites]
I also support a new national labor law that requires employers to pay me from the time I leave my door of my house to the time I return along with fuel and other associated costs!
posted by hippybear at 8:05 AM on June 5, 2023 [15 favorites]
> I also support a new national labor law that requires employers to pay me from the time I leave my door of my house to the time I return along with fuel and other associated costs!
*monkey's paw curls*
"Welcome to your new on-site sleep cubicle, worker ID# 613-04-2213. As you can see, it has two bunks and a private half bath for your exclusive use!"
posted by your postings may, in fact, be signed at 8:21 AM on June 5, 2023 [13 favorites]
*monkey's paw curls*
"Welcome to your new on-site sleep cubicle, worker ID# 613-04-2213. As you can see, it has two bunks and a private half bath for your exclusive use!"
posted by your postings may, in fact, be signed at 8:21 AM on June 5, 2023 [13 favorites]
I work for a consulting firm that, pre-pandemic, had its north american employees flying every week to whereever the client was located. Initially, my company asked that their people live in one of the major cities where they had an office, but it wasn't really a thing: why would it be? You almost never worked out of your home city, so live wherever.
And yet, people who lived in San Francisco (where we have an office) got paid significantly more than people who lived in Dallas (where we also had an office.) It never made sense to me: what should it matter where I live, if I have to fly to get to work no matter what? It was sensible to live in a larger city, because if you lived in, say, Austin, then you were stopping in either Houston or Dallas every week before getting on a second plane to your actual destination. That just added time to your commute, so it made sense to live in a city with an airline hub, but it didn't really affect the costs of transport enough for anybody to pay attention to it.
Then with the pandemic we all worked out of our own houses. No more travel. The only rule was, you have to spend most of your time in the US, for tax reasons. But they still pay people in California more than Texas. The official reason for this is because they would have to pay more to get someone of my skillset in SFO than in DFW were they to hire more people. But that still seems stupid as hell to me. The value of my work is my work, not where I'm located.
I have kids. That was a life choice. I don't ask to get paid more because I have extra mouths to feed. Likewise, if you choose to live in NYC, or the Bay, that is a life choice. You don't have to live there. You could live in any number of places that are still nice but not the most expensive cities on the continent. So why do we choose to pay more for that life choice over mine?
posted by nushustu at 8:25 AM on June 5, 2023 [2 favorites]
And yet, people who lived in San Francisco (where we have an office) got paid significantly more than people who lived in Dallas (where we also had an office.) It never made sense to me: what should it matter where I live, if I have to fly to get to work no matter what? It was sensible to live in a larger city, because if you lived in, say, Austin, then you were stopping in either Houston or Dallas every week before getting on a second plane to your actual destination. That just added time to your commute, so it made sense to live in a city with an airline hub, but it didn't really affect the costs of transport enough for anybody to pay attention to it.
Then with the pandemic we all worked out of our own houses. No more travel. The only rule was, you have to spend most of your time in the US, for tax reasons. But they still pay people in California more than Texas. The official reason for this is because they would have to pay more to get someone of my skillset in SFO than in DFW were they to hire more people. But that still seems stupid as hell to me. The value of my work is my work, not where I'm located.
I have kids. That was a life choice. I don't ask to get paid more because I have extra mouths to feed. Likewise, if you choose to live in NYC, or the Bay, that is a life choice. You don't have to live there. You could live in any number of places that are still nice but not the most expensive cities on the continent. So why do we choose to pay more for that life choice over mine?
posted by nushustu at 8:25 AM on June 5, 2023 [2 favorites]
Nushustu, I agree with you on many counts-a genuine question, how would you take an argument that you should be paid less (in Texas) than coworkers in NC given that Texas doesn’t have any income tax?
posted by raccoon409 at 8:29 AM on June 5, 2023 [1 favorite]
posted by raccoon409 at 8:29 AM on June 5, 2023 [1 favorite]
There’s nothing preventing someone in a rich part of a town from going to the poor part if the prices are lower, but I can’t go to India (or Indiana, for that matter) for my groceries. I live in NYC, and things are way more expensive here than most places. Flat pay rates would hollow out cities. I wouldn’t work for a company who gave me the same amount if money as an employee in Indiana, because it wouldn’t go as far. It would be equality at the cost of equity. Hard pass.
posted by vim876 at 8:30 AM on June 5, 2023 [2 favorites]
posted by vim876 at 8:30 AM on June 5, 2023 [2 favorites]
he found she was on the same salary as the CEO. And the graphic designer. And the CFO. And the content writer. And the software engineer.
Steve Jobs famously took home a one dollar salary. Unless SafetyWing is also handing out equity grants equally, its not quite as egalitarian as it seems. For a variety of reasons, this is probably a good thing.
posted by pwnguin at 8:30 AM on June 5, 2023 [3 favorites]
Steve Jobs famously took home a one dollar salary. Unless SafetyWing is also handing out equity grants equally, its not quite as egalitarian as it seems. For a variety of reasons, this is probably a good thing.
posted by pwnguin at 8:30 AM on June 5, 2023 [3 favorites]
Digital nomadism is extractive and bad for the planet. There's no reason to encourage it. Suburban and exurban sprawl is bad too.
People living in dense cities is good for the environment. Instead of expecting people to move to cheaper locales, why not socialize the cost of housing? I mean socialize literally: social housing has worked really well in Austria, Sweden, Finland, Singapore, avoiding the pitfalls of means-tested, segregated, and shamed public housing in the US.
Don't rely on private corps to enact economic equality. That's the government's job.
posted by splitpeasoup at 8:51 AM on June 5, 2023 [8 favorites]
People living in dense cities is good for the environment. Instead of expecting people to move to cheaper locales, why not socialize the cost of housing? I mean socialize literally: social housing has worked really well in Austria, Sweden, Finland, Singapore, avoiding the pitfalls of means-tested, segregated, and shamed public housing in the US.
Don't rely on private corps to enact economic equality. That's the government's job.
posted by splitpeasoup at 8:51 AM on June 5, 2023 [8 favorites]
I also support a new national labor law that requires employers to pay me from the time I leave my door of my house to the time I return along with fuel and other associated costs!
Long ago I worked for a construction company that basically worked that way. Strictly speaking, you were paid from time of arrival at the compound where the equipment and supplies were located, so then the time driving from there to the site was on the clock. But in practice it wasn't necessary for most people to go to the equipment yard, so you just got paid as-if you were leaving from the yard, meaning your commute from home was on the clock. I liked that system.
posted by Dip Flash at 9:08 AM on June 5, 2023 [2 favorites]
Long ago I worked for a construction company that basically worked that way. Strictly speaking, you were paid from time of arrival at the compound where the equipment and supplies were located, so then the time driving from there to the site was on the clock. But in practice it wasn't necessary for most people to go to the equipment yard, so you just got paid as-if you were leaving from the yard, meaning your commute from home was on the clock. I liked that system.
posted by Dip Flash at 9:08 AM on June 5, 2023 [2 favorites]
I totally get the fairness argument in favor of "same pay across geographies" and I think in general companies with remote workers will move toward that model. I think there are some good things about it. But there are some real tradeoffs as well.
1. It gives a huge economic boost to remote workers in lower pay areas vs. their non-remote neighbors. Will that push prevailing wages up (good) or just create a two-tier system (bad)? What happens to housing in those areas when a subgroup has way more money than the majority? We know how this usually goes.
2. Where are the less expensive places in the US now? What are the politics of those places? "You don't have to live in the expensive place" is not actually true for lots of people for a variety of reasons. From a pure tech / remote work perspective, I saw a lot of folks head out to Texas, Florida, Montana. It is not safe for a lot of people to be in those places. Are we adding to the (already high) premium queer people (or other vulnerable groups) need to pay to be safe?
posted by feckless at 9:27 AM on June 5, 2023 [7 favorites]
1. It gives a huge economic boost to remote workers in lower pay areas vs. their non-remote neighbors. Will that push prevailing wages up (good) or just create a two-tier system (bad)? What happens to housing in those areas when a subgroup has way more money than the majority? We know how this usually goes.
2. Where are the less expensive places in the US now? What are the politics of those places? "You don't have to live in the expensive place" is not actually true for lots of people for a variety of reasons. From a pure tech / remote work perspective, I saw a lot of folks head out to Texas, Florida, Montana. It is not safe for a lot of people to be in those places. Are we adding to the (already high) premium queer people (or other vulnerable groups) need to pay to be safe?
posted by feckless at 9:27 AM on June 5, 2023 [7 favorites]
You don't have to live there. You could live in any number of places that are still nice but not the most expensive cities on the continent. So why do we choose to pay more for that life choice over mine?
Choices to live in places like NYC often also come from, for example: acceptance of your personhood and/or that of your children, access to public transit and your ability to navigate it independently and reliably, and even things like worker protections. Suggesting that those are life choices that should be - effectively - penalized because you either don't know or don't believe the reasoning seems like it could use some introspection.
The expensive places are expensive both because of gouging rents and because of the attractiveness of their culture, safety, and acceptance. It's tough to quantify how much of any of those factors drive expense, and the rent-seeking is disgusting no matter where it happens, but this thread is reading like access to safety, acceptance, and vibrant cultural options bear no weight for both employers and employees.
The logic of "you don't have to live in an expensive area" can be turned around exactly to point out that you don't have to live in a low paying area and can just move to an expensive one. When phrased that way, isn't it obvious that it's not that simple and you have reasons for living where you live? That maybe the things you rely on and services you need and family you have close don't instantly follow you to the more expensive place where you might find better compensation for your employment, but also significant life factors that prevent you from choosing it?
I'm excited by ways in which capital was threatened and labor empowered as the obviously hollow and outdated arguments against remote work were punctured. But let's not pretend that's the only facet of people's entire lives - work might be done anywhere from occasionally to completely remote but family and school and art and all the stuff that's not work that should and does matter have not become so equalized and in some cases don't need to or shouldn't.
posted by abulafa at 9:35 AM on June 5, 2023 [7 favorites]
Choices to live in places like NYC often also come from, for example: acceptance of your personhood and/or that of your children, access to public transit and your ability to navigate it independently and reliably, and even things like worker protections. Suggesting that those are life choices that should be - effectively - penalized because you either don't know or don't believe the reasoning seems like it could use some introspection.
The expensive places are expensive both because of gouging rents and because of the attractiveness of their culture, safety, and acceptance. It's tough to quantify how much of any of those factors drive expense, and the rent-seeking is disgusting no matter where it happens, but this thread is reading like access to safety, acceptance, and vibrant cultural options bear no weight for both employers and employees.
The logic of "you don't have to live in an expensive area" can be turned around exactly to point out that you don't have to live in a low paying area and can just move to an expensive one. When phrased that way, isn't it obvious that it's not that simple and you have reasons for living where you live? That maybe the things you rely on and services you need and family you have close don't instantly follow you to the more expensive place where you might find better compensation for your employment, but also significant life factors that prevent you from choosing it?
I'm excited by ways in which capital was threatened and labor empowered as the obviously hollow and outdated arguments against remote work were punctured. But let's not pretend that's the only facet of people's entire lives - work might be done anywhere from occasionally to completely remote but family and school and art and all the stuff that's not work that should and does matter have not become so equalized and in some cases don't need to or shouldn't.
posted by abulafa at 9:35 AM on June 5, 2023 [7 favorites]
I have kids. That was a life choice. I don't ask to get paid more because I have extra mouths to feed. Likewise, if you choose to live in NYC, or the Bay, that is a life choice. You don't have to live there. You could live in any number of places that are still nice but not the most expensive cities on the continent. So why do we choose to pay more for that life choice over mine?
This is an apt comparison, because just as "having dependents" is not something everyone has complete control over and can change easily, neither is "where you live."
Where is your family? Where is your healthcare? Where is your language spoken commonly? Where are you safe from political persecution? etc. etc.
posted by feckless at 9:36 AM on June 5, 2023 [4 favorites]
This is an apt comparison, because just as "having dependents" is not something everyone has complete control over and can change easily, neither is "where you live."
Where is your family? Where is your healthcare? Where is your language spoken commonly? Where are you safe from political persecution? etc. etc.
posted by feckless at 9:36 AM on June 5, 2023 [4 favorites]
This seems like it would just super-charge gentrification on a global scale. Great for me, but probably not so great for the people I’d be displacing/out-paying.
posted by aramaic at 9:40 AM on June 5, 2023 [3 favorites]
posted by aramaic at 9:40 AM on June 5, 2023 [3 favorites]
My current employer pays the same salary bands for all roles within the US (though I’m unsure if this is true internationally), and I know folks at a few other companies that do this.
It seems to work well for the companies that are based in a high cost-of-living area (e.g., San Francisco), and benchmark to pay well in that location. My coworkers who live in less expensive locations get a nice premium, but the SF-based employees are still doing good.
It works less well for companies that benchmark based on a less expensive location. E.g., a friend works for a St. Louis-based company that follows this model. It effectively means they just can’t hire in more expensive cities.
posted by learning from frequent failure at 10:15 AM on June 5, 2023 [3 favorites]
It seems to work well for the companies that are based in a high cost-of-living area (e.g., San Francisco), and benchmark to pay well in that location. My coworkers who live in less expensive locations get a nice premium, but the SF-based employees are still doing good.
It works less well for companies that benchmark based on a less expensive location. E.g., a friend works for a St. Louis-based company that follows this model. It effectively means they just can’t hire in more expensive cities.
posted by learning from frequent failure at 10:15 AM on June 5, 2023 [3 favorites]
If capital is permitted to exploit regional inequalities, it will do its level best to use that as a way to drive everyone's salaries down.
That's not how it works. As investors seek out out lower-wage workers, the increased demand for labor results in higher wages in those countries.
This isn't just theory. "Developing countries now constitute 48 percent of world trade, up from 33 percent in 2000, and the number of people living in extreme poverty has been cut in half since 1990, to just under one billion people."
Yes, labor should be free to move, just as capital is; yes, we need stronger environmental protections and labor laws and rights; and yes, we need more redistribution both within and across countries. But preventing investors from hiring poor people will only harm those poor people.
posted by Mr.Know-it-some at 11:07 AM on June 5, 2023 [1 favorite]
That's not how it works. As investors seek out out lower-wage workers, the increased demand for labor results in higher wages in those countries.
This isn't just theory. "Developing countries now constitute 48 percent of world trade, up from 33 percent in 2000, and the number of people living in extreme poverty has been cut in half since 1990, to just under one billion people."
Yes, labor should be free to move, just as capital is; yes, we need stronger environmental protections and labor laws and rights; and yes, we need more redistribution both within and across countries. But preventing investors from hiring poor people will only harm those poor people.
posted by Mr.Know-it-some at 11:07 AM on June 5, 2023 [1 favorite]
Choices to live in places like NYC often also come from, for example: acceptance of your personhood and/or that of your children, access to public transit and your ability to navigate it independently and reliably, and even things like worker protections. Suggesting that those are life choices that should be - effectively - penalized because you either don't know or don't believe the reasoning seems like it could use some introspection.
I would completely agree with this, but cities don't really trade on this. They should, and they should make it easy for people who support their policies to move there.
NYC and CA don't, so people actually cannot trade on their relative social advantages, and as such are losing population or growing below the rate of the rest of the US, and thus lost representation in the last census.
TX and Florida are easy to move to, so they are continuing their growth from the last census, gained reps, and will probably get more House Reps in the next census.
posted by The_Vegetables at 12:03 PM on June 5, 2023 [1 favorite]
I would completely agree with this, but cities don't really trade on this. They should, and they should make it easy for people who support their policies to move there.
NYC and CA don't, so people actually cannot trade on their relative social advantages, and as such are losing population or growing below the rate of the rest of the US, and thus lost representation in the last census.
TX and Florida are easy to move to, so they are continuing their growth from the last census, gained reps, and will probably get more House Reps in the next census.
posted by The_Vegetables at 12:03 PM on June 5, 2023 [1 favorite]
If you think rural reds hate big city blues right now, just wait 'til the housing costs driven, flat salary turbocharged worker exodus from the big cities really kicks in, and the children of the rural reds no longer have a hope in hell of owning a house even in their own tiny jerkwater towns.
posted by jamjam at 12:31 PM on June 5, 2023 [2 favorites]
posted by jamjam at 12:31 PM on June 5, 2023 [2 favorites]
If you think rural reds hate big city blues right now, just wait 'til the housing costs driven, flat salary turbocharged worker exodus from the big cities really kicks in, and the children of the rural reds no longer have a hope in hell of owning a house even in their own tiny jerkwater towns.
Ain't gonna happen, because only a tiny percentage of people want to live in small towns. And as referenced upthread, other than housing, almost all other costs are within a 1X multiple of the most expensive cities in the US, so the only thing you can arbitrage on is housing.
posted by The_Vegetables at 12:40 PM on June 5, 2023 [1 favorite]
Ain't gonna happen, because only a tiny percentage of people want to live in small towns. And as referenced upthread, other than housing, almost all other costs are within a 1X multiple of the most expensive cities in the US, so the only thing you can arbitrage on is housing.
posted by The_Vegetables at 12:40 PM on June 5, 2023 [1 favorite]
how would you take an argument that you should be paid less (in Texas) than coworkers in NC given that Texas doesn’t have any income tax?
A sincere answer: I would begin by asking if anyone here thinks that companies who incorporate in Delaware (with its business-friendly tax and liability laws) charge less for their goods and services than companies that aren't incorporated there? I suspect the answer is no and that the numbers will bear that out.
I would do the same for workers. Your work has value, it should be valued. If you wanted to buy a hand-made object from a guy, you wouldn't argue that because the guy lives in Texas, that he should charge less than if he lived in NYC.
Plus, it's not a lack of state income tax is why Texas is cheaper. Texas sucks in a lot of ways, and they have lots of poor people, but one thing that Texas has is money. Texas makes its money. It is a net positive to the federal government, even without state income taxes. It does this via property taxes that are considerably higher than most states.
posted by nushustu at 12:56 PM on June 5, 2023 [1 favorite]
A sincere answer: I would begin by asking if anyone here thinks that companies who incorporate in Delaware (with its business-friendly tax and liability laws) charge less for their goods and services than companies that aren't incorporated there? I suspect the answer is no and that the numbers will bear that out.
I would do the same for workers. Your work has value, it should be valued. If you wanted to buy a hand-made object from a guy, you wouldn't argue that because the guy lives in Texas, that he should charge less than if he lived in NYC.
Plus, it's not a lack of state income tax is why Texas is cheaper. Texas sucks in a lot of ways, and they have lots of poor people, but one thing that Texas has is money. Texas makes its money. It is a net positive to the federal government, even without state income taxes. It does this via property taxes that are considerably higher than most states.
posted by nushustu at 12:56 PM on June 5, 2023 [1 favorite]
Also to note that an awful lot of people live in eg. New York City because they were born and grew up there, it is where their family is, etc.
posted by eviemath at 1:01 PM on June 5, 2023 [4 favorites]
posted by eviemath at 1:01 PM on June 5, 2023 [4 favorites]
What a nice problem to be solved by supply and demand.
posted by MattD at 3:45 PM on June 5, 2023 [1 favorite]
posted by MattD at 3:45 PM on June 5, 2023 [1 favorite]
If you think rural reds hate big city blues right now, just wait 'til the housing costs driven, flat salary turbocharged worker exodus from the big cities really kicks in, and the children of the rural reds no longer have a hope in hell of owning a house even in their own tiny jerkwater towns.
This is 100% already happening especially if said Jerkwater town is 1) particularly scenic or 2) reasonable distance from whatever blue bubble closest to the rural red and 3) has enough tourism traffic because of the former that it's stressed the local housing market. I mean, not all Jerkwater towns but more than you probably think. You end up with weird situations like unemployed locals in pick up trucks trying to scare cyclists off the road because they think their hometown is being stolen out from under them and those cyclists are a symbol of all that is wrong.
And hey, I'm into greater pay equality. Geography feels like a weird rubric, though. Like, it's great if you're going to pay an app developer in Mumbai the same as you'd pay them in the Bay Area. But if I'm honest, it'd also be great we, like, strove for greater equity in pay between nurses and hospital administrators even in the same zipcode.
posted by thivaia at 3:58 PM on June 5, 2023 [6 favorites]
This is 100% already happening especially if said Jerkwater town is 1) particularly scenic or 2) reasonable distance from whatever blue bubble closest to the rural red and 3) has enough tourism traffic because of the former that it's stressed the local housing market. I mean, not all Jerkwater towns but more than you probably think. You end up with weird situations like unemployed locals in pick up trucks trying to scare cyclists off the road because they think their hometown is being stolen out from under them and those cyclists are a symbol of all that is wrong.
And hey, I'm into greater pay equality. Geography feels like a weird rubric, though. Like, it's great if you're going to pay an app developer in Mumbai the same as you'd pay them in the Bay Area. But if I'm honest, it'd also be great we, like, strove for greater equity in pay between nurses and hospital administrators even in the same zipcode.
posted by thivaia at 3:58 PM on June 5, 2023 [6 favorites]
What a nice problem to be solved by supply and demand.
I think this cuts both ways, for both employers and employees. If you are an employer in an expensive city who wants to hire locally, or an employer anywhere who wants to hire nationally, you need to offer nationally-competitive wages. Conversely, if you are a worker who wants that high wage, you pretty much have to be either willing to move to the expensive city, or be able to compete for the nationally-competitive jobs.
I work for a large company with offices all over the place, and I can see this in our pay structure just by looking at internal job postings. Offices that mostly work locally pay at the local rate, whatever that is. Offices that need to access a national (or international) pool of applicants pay a lot more, and those jobs are a lot more likely to be structured around working remotely. The remote work (or looked at differently, locational flexibility) is starting to be as much an expected perk as is the higher salary for those positions.
posted by Dip Flash at 7:11 PM on June 5, 2023 [1 favorite]
I think this cuts both ways, for both employers and employees. If you are an employer in an expensive city who wants to hire locally, or an employer anywhere who wants to hire nationally, you need to offer nationally-competitive wages. Conversely, if you are a worker who wants that high wage, you pretty much have to be either willing to move to the expensive city, or be able to compete for the nationally-competitive jobs.
I work for a large company with offices all over the place, and I can see this in our pay structure just by looking at internal job postings. Offices that mostly work locally pay at the local rate, whatever that is. Offices that need to access a national (or international) pool of applicants pay a lot more, and those jobs are a lot more likely to be structured around working remotely. The remote work (or looked at differently, locational flexibility) is starting to be as much an expected perk as is the higher salary for those positions.
posted by Dip Flash at 7:11 PM on June 5, 2023 [1 favorite]
Offices that mostly work locally pay at the local rate, whatever that is. Offices that need to access a national (or international) pool of applicants pay a lot more, and those jobs are a lot more likely to be structured around working remotely. The remote work (or looked at differently, locational flexibility) is starting to be as much an expected perk as is the higher salary for those positions.
Is there any difference in work required or weight of responsibility between these positions in these different tiers you describe? Or is this just a geographic difference? It seems to me also, unless the employee is also paying for travel, then those remote jobs not only come with a higher salary level but with paid travel perks that local only jobs would not offer.
posted by hippybear at 7:47 PM on June 5, 2023 [1 favorite]
Is there any difference in work required or weight of responsibility between these positions in these different tiers you describe? Or is this just a geographic difference? It seems to me also, unless the employee is also paying for travel, then those remote jobs not only come with a higher salary level but with paid travel perks that local only jobs would not offer.
posted by hippybear at 7:47 PM on June 5, 2023 [1 favorite]
If you wanted to buy a hand-made object from a guy, you wouldn't argue that because the guy lives in Texas, that he should charge less than if he lived in NYC.
Huh? People do this all the time. If you go on Etsy, and you want a monogrammed tea cozy or whatever, and there are two people selling monogrammed tea cozys, and one charges $15 and the other charges $25, and they're exactly the same end product…? I don't think many people are going to dig into the details to determine, much less care, that the $25 one comes from someone in a high-cost locale.
And moreover, I'm not sure they should. For the buyer, who is spending their money and thus (assuming they aren't a member of the financier / vampire-squid / klept class) their saved-up and time-shifted labor, buying the lower-priced item effectively makes their labor worth more in real terms.
That, of course, presumes that we have a marketplace that doesn't allow absurd, perverse scenarios that will obviously lead to a race-to-the-bottom between workers, like allowing imports from places with shitty or nonexistent labor or environmental laws to be dumped on the market to compete with products from places that offer those protections. I mean, that would be ridiculous.
posted by Kadin2048 at 8:04 PM on June 5, 2023 [1 favorite]
Huh? People do this all the time. If you go on Etsy, and you want a monogrammed tea cozy or whatever, and there are two people selling monogrammed tea cozys, and one charges $15 and the other charges $25, and they're exactly the same end product…? I don't think many people are going to dig into the details to determine, much less care, that the $25 one comes from someone in a high-cost locale.
And moreover, I'm not sure they should. For the buyer, who is spending their money and thus (assuming they aren't a member of the financier / vampire-squid / klept class) their saved-up and time-shifted labor, buying the lower-priced item effectively makes their labor worth more in real terms.
That, of course, presumes that we have a marketplace that doesn't allow absurd, perverse scenarios that will obviously lead to a race-to-the-bottom between workers, like allowing imports from places with shitty or nonexistent labor or environmental laws to be dumped on the market to compete with products from places that offer those protections. I mean, that would be ridiculous.
posted by Kadin2048 at 8:04 PM on June 5, 2023 [1 favorite]
That, of course, presumes that we have a marketplace that doesn't...
Hahahaha. hahah. haha ha ha. ha.
This is late stage capitalism, well baked neoliberalism. There is no advantage that a marketplace might grab that they won't. Governments aligned with neoliberalism won't reign in unfettered capitalism, so this is the reality we live in.
There is no "marketplace that doesn't..." unless there are already existing regulations in place to prevent them. And outside of the EU, nobody is making those anymore.
posted by hippybear at 8:12 PM on June 5, 2023 [1 favorite]
Hahahaha. hahah. haha ha ha. ha.
This is late stage capitalism, well baked neoliberalism. There is no advantage that a marketplace might grab that they won't. Governments aligned with neoliberalism won't reign in unfettered capitalism, so this is the reality we live in.
There is no "marketplace that doesn't..." unless there are already existing regulations in place to prevent them. And outside of the EU, nobody is making those anymore.
posted by hippybear at 8:12 PM on June 5, 2023 [1 favorite]
nushutsu, I may be misunderstanding, but are you suggesting that Texan property taxes get paid to the federal government?
Per WalletHub, California has a substantially lower total tax burden for the median household than Texas does, and still does a little better when you factor in cost of living. No state personal income tax can be a big win for people with high incomes and small apartments (landlords pass the property taxes on to tenants, of course), but it's not for most people.
posted by aneel at 9:23 PM on June 5, 2023 [1 favorite]
Per WalletHub, California has a substantially lower total tax burden for the median household than Texas does, and still does a little better when you factor in cost of living. No state personal income tax can be a big win for people with high incomes and small apartments (landlords pass the property taxes on to tenants, of course), but it's not for most people.
posted by aneel at 9:23 PM on June 5, 2023 [1 favorite]
> Huh? People do this all the time. If you go on Etsy, and you want a monogrammed tea cozy or whatever, and there are two people selling monogrammed tea cozys, and one charges $15 and the other charges $25, and they're exactly the same end product…? I don't think many people are going to dig into the details to determine, much less care, that the $25 one comes from someone in a high-cost locale.
On Etsy, both sellers are drop-shipping you something from a country where child labor is not just legal but encouraged. The price you paid never mattered. $15 or $25, it is a $1 item drop-shipped from a country where a child laborer was paid $0.15 per piece
I happen to live in the same city where Etsy pretended to keep their HQ and boy howdy -- when the execs decided that their core business was "alibaba/aliexpress but for americans" that attitude didn't stop with the sellers. They fired everbody with a spine and a lot of people who didn't have one
posted by your postings may, in fact, be signed at 11:47 PM on June 5, 2023 [2 favorites]
On Etsy, both sellers are drop-shipping you something from a country where child labor is not just legal but encouraged. The price you paid never mattered. $15 or $25, it is a $1 item drop-shipped from a country where a child laborer was paid $0.15 per piece
I happen to live in the same city where Etsy pretended to keep their HQ and boy howdy -- when the execs decided that their core business was "alibaba/aliexpress but for americans" that attitude didn't stop with the sellers. They fired everbody with a spine and a lot of people who didn't have one
posted by your postings may, in fact, be signed at 11:47 PM on June 5, 2023 [2 favorites]
I am a university employee in Alaska, and they have a “geographic differential” — same salary schedule for everyone (or, for faculty, whatever you negotiated), but if you live in Kotzebue or Nome or wherever else outside Fairbanks/Anchorage/Juneau, you get x% more (Where x is substantial. Maybe 40?) because things like groceries cost so much more.
There was a story of a faculty member who pissed off his Dean and got told he was now working in Dillingham or some other small village (that had a university campus). So there he went for four or five years…and definitely got the GeoDiff.
posted by leahwrenn at 1:55 AM on June 6, 2023 [4 favorites]
There was a story of a faculty member who pissed off his Dean and got told he was now working in Dillingham or some other small village (that had a university campus). So there he went for four or five years…and definitely got the GeoDiff.
posted by leahwrenn at 1:55 AM on June 6, 2023 [4 favorites]
Is there any difference in work required or weight of responsibility between these positions in these different tiers you describe? Or is this just a geographic difference? It seems to me also, unless the employee is also paying for travel, then those remote jobs not only come with a higher salary level but with paid travel perks that local only jobs would not offer.
There's kind of two sides to the travel thing -- some positions get "travel perks" but also work travel gets old fast, so there are reasons someone might choose a local position to avoid the travel entirely.
In terms of responsibility, I don't think it breaks down quite that way. It's like, say you have a tech company, and you have a division that does in-person critical support for local clients (i.e., hires locally and pays locally) and another division that works for national clients (i.e., can and does pay higher salaries to compete with national competitors, many of whom live in expensive cities). So a single company, but with more than one business model within it, so you can see the different dynamics within a single entity.
I'm not sure where this will all shake out. The work I am doing seems, at least for now, to be very much going int he location-independent direction, but I'm not confident it will look this way in five or ten years.
posted by Dip Flash at 5:37 AM on June 6, 2023 [1 favorite]
There's kind of two sides to the travel thing -- some positions get "travel perks" but also work travel gets old fast, so there are reasons someone might choose a local position to avoid the travel entirely.
In terms of responsibility, I don't think it breaks down quite that way. It's like, say you have a tech company, and you have a division that does in-person critical support for local clients (i.e., hires locally and pays locally) and another division that works for national clients (i.e., can and does pay higher salaries to compete with national competitors, many of whom live in expensive cities). So a single company, but with more than one business model within it, so you can see the different dynamics within a single entity.
I'm not sure where this will all shake out. The work I am doing seems, at least for now, to be very much going int he location-independent direction, but I'm not confident it will look this way in five or ten years.
posted by Dip Flash at 5:37 AM on June 6, 2023 [1 favorite]
Per WalletHub, California has a substantially lower total tax burden for the median household than Texas does, and still does a little better when you factor in cost of living.
That's somewhat true, but you have to remember the median household in CA has owned their home for 20 years, whereas TX is at the national median of 7 years between moves, so you have to compare home prices/property taxes 20 years ago due to Prop 13 vs 7 years ago. If you compare tax rates between new entrants to CA vs TX, the story is different, but really not dramatically so, within the the $1k-$3k range per year in tax differential.
Which is why people for the most part don't move based on marginal tax differences, even if some say they do.
posted by The_Vegetables at 8:08 AM on June 6, 2023 [1 favorite]
That's somewhat true, but you have to remember the median household in CA has owned their home for 20 years, whereas TX is at the national median of 7 years between moves, so you have to compare home prices/property taxes 20 years ago due to Prop 13 vs 7 years ago. If you compare tax rates between new entrants to CA vs TX, the story is different, but really not dramatically so, within the the $1k-$3k range per year in tax differential.
Which is why people for the most part don't move based on marginal tax differences, even if some say they do.
posted by The_Vegetables at 8:08 AM on June 6, 2023 [1 favorite]
Per WalletHub, California has a substantially lower total tax burden for the median household than Texas does, and still does a little better when you factor in cost of living. No state personal income tax can be a big win for people with high incomes and small apartments (landlords pass the property taxes on to tenants, of course), but it's not for most people.
Where are you getting that from the link? "Annual State & Local Taxes on Median State Household" put California at 9k, Texas at 8k.
But the real problem with that link is it's purely theoretical. It's based on listed tax rates, and assumptions about expenditures and income, not actual paid taxes. Even WalletHub puts California (12th) way ahead of Texas (29th) in terms of taxes paid when they use actual tax burden data.
posted by mark k at 7:22 PM on June 6, 2023 [1 favorite]
Where are you getting that from the link? "Annual State & Local Taxes on Median State Household" put California at 9k, Texas at 8k.
But the real problem with that link is it's purely theoretical. It's based on listed tax rates, and assumptions about expenditures and income, not actual paid taxes. Even WalletHub puts California (12th) way ahead of Texas (29th) in terms of taxes paid when they use actual tax burden data.
posted by mark k at 7:22 PM on June 6, 2023 [1 favorite]
Since we're talking about moving from one state to another, I was comparing the median US household column ($6,238 for CA vs $8,846 for TX), not the median state household column. Just because more people in TX than CA are below average doesn't mean that someone who moved from CA to TX would become below average. The same holds true of comparisons of actual tax burden: you don't want to compare what people there pay, you want to compare what you'd pay if you moved there.
posted by aneel at 8:46 PM on June 6, 2023 [1 favorite]
posted by aneel at 8:46 PM on June 6, 2023 [1 favorite]
Texas structures there taxes to collect significantly less money from Texans than California collects from their residents. This is true both in absolute dollar terms
Just because more people in TX than CA are below average doesn't mean that someone who moved from CA to TX would become below average.
The median home price in California is well over twice the median home price in Texas. So yes, some people who move will slide from "above average" on the relevant to metric to "below average" and basically everyone will slide down national ranking.
This isn't just some theoretical claim: Homeowners I've known who've moved (outside of retirees) have both significantly increased their home size and decreased their mortgage.
So the "national median" just isn't relevant. Texas collects a relatively low amount of their inhabitants' income as taxes. If they wanted to be a high tax state they'd structure taxes and spending differently.
posted by mark k at 9:13 PM on June 6, 2023 [1 favorite]
Just because more people in TX than CA are below average doesn't mean that someone who moved from CA to TX would become below average.
The median home price in California is well over twice the median home price in Texas. So yes, some people who move will slide from "above average" on the relevant to metric to "below average" and basically everyone will slide down national ranking.
This isn't just some theoretical claim: Homeowners I've known who've moved (outside of retirees) have both significantly increased their home size and decreased their mortgage.
So the "national median" just isn't relevant. Texas collects a relatively low amount of their inhabitants' income as taxes. If they wanted to be a high tax state they'd structure taxes and spending differently.
posted by mark k at 9:13 PM on June 6, 2023 [1 favorite]
The taxes (in $) paid by the median CA household in CA are more than the taxes that would be paid by the median US household in CA. That means that the median CA household has a higher income than the median US household.
The taxes (in $) paid by the median TX household in TX are less than the taxes that would be paid by the median US household in TX. That means that the median TX household has a lower income than the median US household.
If someone moves from CA to TX, are you assuming their income will fall proportionally to the difference in the medians?
I moved from CA to TX roughly 10 years ago. My income did not fall.
posted by aneel at 6:31 AM on June 7, 2023 [1 favorite]
The taxes (in $) paid by the median TX household in TX are less than the taxes that would be paid by the median US household in TX. That means that the median TX household has a lower income than the median US household.
If someone moves from CA to TX, are you assuming their income will fall proportionally to the difference in the medians?
I moved from CA to TX roughly 10 years ago. My income did not fall.
posted by aneel at 6:31 AM on June 7, 2023 [1 favorite]
I happen to live in the same city where Etsy pretended to keep their HQI worked at Etsy and I’m struggling to understand what you mean by “pretended” here. The HQ was lovely and well-attended in my experience.
posted by Cogito at 8:04 AM on June 7, 2023 [1 favorite]
I have kids. That was a life choice. I don't ask to get paid more because I have extra mouths to feed.
I have kids. When they were born, my employer-subsidized insurance immediately covered them, too. My total compensation _absolutely_ increased, even if my base pay didn't. Maybe not because I had another mouth to feed, but because I had another person to insure. I also get a childcare subsidy (in addition to the FSA dependent care benefits) that the child-free folks I work with don't.
We can talk about how having healthcare tied to employment is a terrible thing, but if you consider it to be part of your compensation (and for most professionals, it is), then the people with dependents who are part of subsidized insurance are being paid more than those without.
posted by toxic at 12:42 PM on June 7, 2023 [1 favorite]
I have kids. When they were born, my employer-subsidized insurance immediately covered them, too. My total compensation _absolutely_ increased, even if my base pay didn't. Maybe not because I had another mouth to feed, but because I had another person to insure. I also get a childcare subsidy (in addition to the FSA dependent care benefits) that the child-free folks I work with don't.
We can talk about how having healthcare tied to employment is a terrible thing, but if you consider it to be part of your compensation (and for most professionals, it is), then the people with dependents who are part of subsidized insurance are being paid more than those without.
posted by toxic at 12:42 PM on June 7, 2023 [1 favorite]
The taxes (in $) paid by the median TX household in TX are less than the taxes that would be paid by the median US household in TX. That means that the median TX household has a lower income than the median US household.
It doesn't mean that because Texas doesn't tax income.
Texas taxes property, so what that stat means (well, implies) is that real estate costs less in Texas than it does in other parts of the country. Which is true fact--I even posted a link to the vast difference in home prices! Texas collects its (relatively low) level of taxes by assessing them based on its (relatively low) real estate costs. They could have assessed their taxes on, I don't know, distance from Canada and it would result in the same relationship between purely theoretical tax rates on the "median" American and what Texas actually charges its inhabitants.
I moved from CA to TX roughly 10 years ago. My income did not fall.
Did you bring one of those tiny California homes that nonetheless cost a million dollars with you? Because that's the relevant basis for Texas taxes.
posted by mark k at 10:42 PM on June 7, 2023 [1 favorite]
It doesn't mean that because Texas doesn't tax income.
Texas taxes property, so what that stat means (well, implies) is that real estate costs less in Texas than it does in other parts of the country. Which is true fact--I even posted a link to the vast difference in home prices! Texas collects its (relatively low) level of taxes by assessing them based on its (relatively low) real estate costs. They could have assessed their taxes on, I don't know, distance from Canada and it would result in the same relationship between purely theoretical tax rates on the "median" American and what Texas actually charges its inhabitants.
I moved from CA to TX roughly 10 years ago. My income did not fall.
Did you bring one of those tiny California homes that nonetheless cost a million dollars with you? Because that's the relevant basis for Texas taxes.
posted by mark k at 10:42 PM on June 7, 2023 [1 favorite]
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