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Google United Kingdom IT

Should Google Cut Salaries For Its Remote Workers? (inc.com) 429

A columnist for Inc. writes that Google "may reduce the salaries of employees who choose to work at home full-time, based on the cost of living where they live, according to an internal calculator viewed by Reuters."

They also argue that Google's move is "likely to be a disaster." It may seem sensible, given that a salary that barely covers a San Francisco studio apartment might get you a mansion in, say, Topeka. That's the logic Google says it's using. "Our compensation packages have always been determined by location," a spokesperson told Reuters.

But cutting pay for existing employees who opt to work from home is a terrible idea and it shows a complete lack of emotional intelligence. If Google is smart, it will shelve this idea. So will Facebook, Twitter, the UK government, and any other company considering a similar move. Here's why:

1. A salary is about more than just paying the bills... In real life, a pay cut will feel like an insult to most employees, even if it has nothing to do with their performance or their value to the company. You're literally telling them that they're worth less. Is that the message you want them to hear?

2. Google is being greedy... Like other tech giants, it's thrived during the pandemic. Cutting people's salaries when your share price has more than doubled, your revenues are up 62 percent, and your profits are up even more seems like the pinnacle of corporate greed. Not a good look.

3. It will make Google even more unequal than it already is...

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Should Google Cut Salaries For Its Remote Workers?

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  • by dirk ( 87083 ) <dirk@one.net> on Sunday August 29, 2021 @06:30PM (#61742579) Homepage

    This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives? If Google is willing to pay someone in San Francisco $200,000 to do a job, why would the job be worth less if the person lived in Idaho? They are doing the same job, so the location shouldn't matter at all. This is why companies want to keep salaries secret, because they want to pay the least amount possible for the most work and why employees should discuss their salaries all the time, to keep the company honest in their pay. Working remote is working remote, regardless of the location.

    • why not demand companies pay what the job is worth to them regardless of where the person lives?

      Who decides the "worth" of each job?

      Here's a better idea: If you aren't paid what you're worth, then go get a different job. If no one is willing to pay you what you're worth, then maybe you are worth as much as you think you are.

      • by shaper ( 88544 ) on Sunday August 29, 2021 @06:53PM (#61742677) Homepage

        why not demand companies pay what the job is worth to them regardless of where the person lives?

        Who decides the "worth" of each job?

        The market.

        Here's a better idea: If you aren't paid what you're worth, then go get a different job. If no one is willing to pay you what you're worth, then maybe you are worth as much as you think you are.

        That built-in assumes that the workers will not find similar or even better compensation elsewhere. They have not even reached the point yet where that is a question. Google has already set the worth of the job, by definition, because they are paying it today. Now Google wants to arbitrarily reduce the worth of the job. But the market sets the worth, not Google. The labor market of desirable workers will decide whether or not that is a good move for Google.

        • by Known Nutter ( 988758 ) on Sunday August 29, 2021 @08:29PM (#61742965)
          When The Market (tm) offers employers a nationwide or worldwide pool of candidates, then one cannot be too upset when the price of a given job is driven down. Be careful what you wish for -- the market will indeed set the worth. The guy in living Idaho might be willing (likely) to do the job for less than you living in San Diego.

          Also, Google is part of the market, like it or not.
      • why not demand companies pay what the job is worth to them regardless of where the person lives?

        Who decides the "worth" of each job?

        Here's a better idea: If you aren't paid what you're worth, then go get a different job. If no one is willing to pay you what you're worth, then maybe you are worth as much as you think you are.

        You're talking about existing employees, not new hires. You could at any time renegotiate an employee's compensation downwards because they're less useful to you, and worth less. Your performance was substandard last year, we're lowering your salary.

        Why doesn't that happen in practice? If you want someone out then just do it, let them go. I can't think of anything more insulting than lowering someone's salary because you assessed their worth lower, while you expect them to do the exact same work, while

      • "Here's a better idea: If you aren't paid what you're worth, then go get a different job. If no one is willing to pay you what you're worth, then maybe you are worth as much as you think you are."

        That's the same idea. Google has tried to collude in an illegal fashion with it's competitors to apply similar policies here but if one doesn't stick to the agreement they can scoop up a substantial amount of Google talent without having to spend a dime more on labor than they do today. Sure Google has a buffer bec
    • by quonset ( 4839537 ) on Sunday August 29, 2021 @06:37PM (#61742609)

      This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives?

      Here's an even crazier idea. Why not demand companies pay the same salary regardless of who is doing the job? They are doing the same job so sex shouldn't matter [payscale.com].

      • This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives?

        Here's an even crazier idea. Why not demand companies pay the same salary regardless of who is doing the job? They are doing the same job so sex shouldn't matter [payscale.com].

        And, a female economist studied the pay gap and found that it is due to women having different priorities. Women as a group:
        choose more often to work for non-profits which pay less. They often do this right our of university which decreases their earnings their entire career.
        choose jobs with companies whose ideologies and policies make the women feel good over companies that pay better.
        choose jobs with lower pay but have other benefits they rate more important, such as longer maternity leave, more time o

    • by fuzznutz ( 789413 ) on Sunday August 29, 2021 @06:52PM (#61742669)

      This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives? If Google is willing to pay someone in San Francisco $200,000 to do a job, why would the job be worth less if the person lived in Idaho?

      Because they have to offer $200,000 to entice employees to move to San Francisco. If you're going to hang out in Idaho, they only have to pay you slightly more than what you can make there in person or on another remote work job.

      In other words, Duuuh... A job is only worth what it costs to fill it from the pool of qualified candidates. No more. No less.

      • by Tough Love ( 215404 ) on Sunday August 29, 2021 @07:42PM (#61742809)

        they have to offer $200,000 to entice employees to move to San Francisco

        So what the fuck is so important about having employees work in San Francisco? ([ed] that should be spelled Bay Area.)

        Let employees pay extra to live in San Francisco if that's what floats their boat. Bear in mind that Googlers are widely hated in San Francisco for being self infatuated dorks driving up property prices. Corporate droids at HQ are proposing to pour fuel on that fire.

        • So what the fuck is so important about having employees work in San Francisco?

          In the long run, nothing. Remote work will migrate away from high-cost coastal cities. Workers will either have to move, eat the cost, or go back to the office.

          In the short run? Google has to pay more to retain SF-BA workers because the market rate for salaries is much higher there. If they don't pay the market rate, they will lose the employees.

        • by pauljlucas ( 529435 ) on Monday August 30, 2021 @12:23AM (#61743387) Homepage Journal

          So what the fuck is so important about having employees work in San Francisco? ([ed] that should be spelled Bay Area.)

          It's not about them having them work in the Bay Area. It's about being where a lot of talent is. Berkeley and Stanford, two of the best schools for CS, are constantly churning out new grads; plus there's access for them to all that VC money on Sand Hill Road; consequently, there's all these innovative start-ups to choose from to buy. As a bonus, the weather is generally pleasant most of the year.

      • This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives? If Google is willing to pay someone in San Francisco $200,000 to do a job, why would the job be worth less if the person lived in Idaho?

        Because they have to offer $200,000 to entice employees to move to San Francisco. If you're going to hang out in Idaho, they only have to pay you slightly more than what you can make there in person or on another remote work job.

        In other words, Duuuh... A job is only worth what it costs to fill it from the pool of qualified candidates. No more. No less.

        You're going to need to put that in the employment agreement, that base pay is $100k and COLA is $100k for San Francisco, and $5k for Idaho. Not for legal reasons, or maybe for that but mainly so the expectations are known up front and very clear.

        There's a reason you let poor performers, or redundant staff go, or you find other work for them. You don't just adjust their salary down to the level of worth they have to you that year. If you have no work for an engineer, you pay them as an engineer and let t

        • You don't have to offer them anything more than remote market rates. Do you expect to spend exactly the same for lobster in Des Moines, Iowa as you do in Portland, Maine? Does gasoline cost exactly the same in San Francisco as it does Knoxville, Tennessee? If the employee doesn't want market rates from their remote location, they can trot back to the office and keep their high pay.
          • by dirk ( 87083 ) <dirk@one.net> on Sunday August 29, 2021 @09:24PM (#61743091) Homepage

            You are looking at it only from the companies POV. If I live in SF and they pay me $200,000 a year to do my job, then my job is worth $200,000 to them. IF I move to Idaho and continue to do the exact same job, my job is worth the same $200,000 to the company. The fact you think they should be able to pay me less simply because I moved means you believe the company is the only important part of this equation. You are basically saying they can pay me as little as they want and I should just take it and be happy. It looks at the employer as some benevolent benefactors who we are lucky to have paying us instead of a company that needs it's works to accomplish anything and should be paying it's employees a fair wage.

            • You are looking at it only from the companies POV. If I live in SF and they pay me $200,000 a year to do my job, then my job is worth $200,000 to them. IF I move to Idaho and continue to do the exact same job, my job is worth the same $200,000 to the company

              Except your job clearly ISN'T worth the same $200,000 or Google wouldn't be asking you to show up to work in person. Google is a business, every decision is made for a business reason. They aren't asking employees to come into the building (a building

            • Why do people think that supply and demand never apply to them? Demand does not exist in a vacuum and neither does supply.

              You are looking at it only from the companies POV. If I live in SF and they pay me $200,000 a year to do my job, then my job is worth $200,000 to them. IF I move to Idaho and continue to do the exact same job, my job is worth the same $200,000 to the company. The fact you think they should be able to pay me less simply because I moved means you believe the company is the only important part of this equation. You are basically saying they can pay me as little as they want and I should just take it and be happy. It looks at the employer as some benevolent benefactors who we are lucky to have paying us instead of a company that needs it's works to accomplish anything and should be paying it's employees a fair wage.

              The job is worth $200,000 because that is how much is required to hire and retain qualified people to work in their business where they want them to be. The don't pay you how much you think the job should be valued or what you think is your "fair wage". They would pay minimum wage if they could get qualified candidates to work for that. If you don't believe me, apply for a no-skill-

          • That depends (Score:3, Interesting)

            by SuperKendall ( 25149 )

            Do you expect to spend exactly the same for lobster in Des Moines, Iowa as you do in Portland, Maine?

            If that lobster can do a good job running a website at scale - yes.

            Someone who has helped built up Google to what it is, and is well versed in its system is worth quite a lot no matter where they actually live.

            Maybe on hiring you factor in where they are living but once they've been with you a while the salary should be a lot more about how valuable they are as an employee than where they live.

      • A job is only worth what it costs to fill it from the pool of qualified candidates.

        And the pool just got a whole lot bigger. At the scale of google, I don't think its very smart to save a few million dollars nickel and diming employees over cost of living, when its just going to make it easier for them to be poached by other big tech companies. The real question is how long until they shift development out of San Francisco.

      • by drhamad ( 868567 ) on Sunday August 29, 2021 @10:31PM (#61743215)
        Yeah, it's pretty funny reading the comments in here. The value of an employee in a certain location is X. That's not the value of their work, it's the value of their work *in that location*. If the location is "anywhere", they don't need to attract the value in a certain location.
    • by godrik ( 1287354 )

      why not demand companies pay what the job is worth to them regardless of where the person lives?

      Because like everything in life, the worth of a job is not easily quantified.
      There is an amount that as a company you think this position is going to generate. Let's make a simple example. If you can do this job, the company bottom line goes up by $60000 a year.
      So fundamentally, the company is ready to pay ANY salary that is below $60000 a year. That means $30000 is OK, that means $59999 is ok. Though, the company may be able to find someone willing to do it at $55000.

      Now from the employees perspective. May

      • This. There are actually few people making anything near the upper limit of their productive value but lots of people making far less, and the massive pay disparities between workers in the same role among companies where pay is secret would blow people's minds and cause management to shit all the bricks if it were ever made public.

        Cutting the pay of workers who move away seems greedy and totally is, but it's part of a larger plan to ratchet down worker pay which as a side-effect could rapidly alleviate geo

    • This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives? If Google is willing to pay someone in San Francisco $200,000 to do a job, why would the job be worth less if the person lived in Idaho? They are doing the same job, so the location shouldn't matter at all.

      Companies aren't 'willing' to pay higher salaries in Silicon Valley, they are forced to - the cost of living in Silicon Valley forces that reality.

      And why should a Silicon Valley job pay any more than the same job in Idaho? Or Kansas, or Mississippi?

      • Companies aren't 'willing' to pay higher salaries in Silicon Valley, they are forced to

        They are not forced to. They choose to because they are so rich they have no need to economize. Now they want their employees so subsidize that vanity project.

    • by DERoss ( 1919496 )

      This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives?

      Absolutely! A company can easily determine the value of an employee and pay that employee accordingly.

      Unless the company totally invades the employee's privacy, it really cannot determine the employee's living costs in order to pay according to those costs. For example, should a company pay an employee more simply because he or she is living with someone who has a health condition that requires equipment that consumes a lot of electricity? How about paying the employee based on how many children he or sh

    • This may be a crazy idea, but why not demand companies pay what the job is worth to them regardless of where the person lives?

      Because pay is also livelihood. For better or worse, we've tied the two together. So your pay isn't just about the work you do, it is also about your ability to live. If people want to make the argument of a "living wage" then they have accept that a wage has something to do with how you live and not just about your job.

      why would the job be worth less if the person lived in Idaho?

      Because when you are in Idaho, the part of that wage that makes it okay to live in San Francisco isn't as pressing an issue in Idaho. Again, a living wage isn't just the work you do, tha

  • by theshowmecanuck ( 703852 ) on Sunday August 29, 2021 @06:31PM (#61742583) Journal
    Google: Our policy is to be inclusive. We want all our lower paid employees to feel like they are barely scraping by wherever they may live. At the moment we have positions open in Buttfuck Arkansas for $9.50/hour with no benefits. We can compete with Walmart on a level field.

    Truthfully, I wonder if other companies are getting on their case wrt this. If Google keeps paying high wages to people working in small towns in the middle of nowhere, this could upset corporate one horse town hostage economies for many large companies.
  • They can try (Score:4, Insightful)

    by memory_register ( 6248354 ) on Sunday August 29, 2021 @06:34PM (#61742593)
    and if it backfires, then they know. We live in a time of unusual circumstances. Who knows?

    It might go great, it might end up being a brain drain, it might change the market dynamics enough to destabilize Silicon Valley as a location (but not an idea). i have heard arguments for all three, but I do not have even a whisp of a guess here.
  • by Kaenneth ( 82978 ) on Sunday August 29, 2021 @06:37PM (#61742611) Journal

    Get a shared mailing address in a Manhattan penthouse, so you get the cost of living adjustments for there.

    Just like the corps are all 'A Delaware Corporation'

    • I know someone who did that.

    • by arosenfield ( 998621 ) on Sunday August 29, 2021 @07:07PM (#61742719)

      If you do that, your state income taxes will be going to the wrong state, which is going to make the state you actually live in very unhappy when they find out you're earning income in that state but not paying taxes. Don't commit tax fraud.

      • Right, don't. Be perfectly honest with the tax department(s) about where you live. They are barred by law from ratting you out.

      • by crow ( 16139 )

        Exactly!

        And in the example, I think there are city income taxes. But you could give them a San Francisco address instead of San Dimas. That would be most excellent. As long as they aren't paying any travel expenses where the real location matters.

    • by vilain ( 127070 )
      Back in the 80s, I worked for DEC. They offered a special monthly location stipend for software specialists to live in Manhattan. These were people who's services they sold to banks and large companies to do software projects. I got a car stipend because my car fell within their criteria rather than get a leased company car. I was expected to use the car to travel to customer sites to perform work for the company. I can't say for certain, but I would guess that a software engineer living and commuting to
  • by Z80a ( 971949 )

    Also double down and cut even more every time they complain until the problem is gone and nobody is complaining about the low salaries

    • We could add the AI threat, and everybody will be fine...
      • by Z80a ( 971949 )

        Oh yes, they should tell all their AI programmers that in 2 years time, they will be replaced with AI, that will do the trick just fine

  • People who live in high cost areas are paying for the benefits of living in those areas. Living in New York or San Francisco is like living in a theme park. There's fun things to do 24-7. They are making a choice with their take home pay to live in a place a lot of other people would love to live. If Google instead wants to provide employees housing, then sure, they should start adjusting pay by accounting for an employees total compensation.

    What this is really about is negotiating power. Businesses sudde
  • Sure (Score:5, Insightful)

    by bobstreo ( 1320787 ) on Sunday August 29, 2021 @06:50PM (#61742655)

    as long as you add back the cost of not having to buy/rent office space, security, parking space, food in the cafeteria, exercise facilities and the taxes on all the previous back to the remote workers.

    If you discuss paying people less that work remotely, depending on where they are living, you're gonna have a bad time, because just like shit minimum wage jobs, there's always someone who will pay more to remote workers, just because they're cheaper than office drones and REMF managers.

    • by cstacy ( 534252 )

      they're cheaper than office drones and REMF managers.

      What is a REMF manager? Sounds like someone in charge of destructive operators?

      INCF managers are the ones who ought to be paid higher!

      • they're cheaper than office drones and REMF managers.

        What is a REMF manager? Sounds like someone in charge of destructive operators?

        INCF managers are the ones who ought to be paid higher!

        Rear Echelon Mother Fuckers.

      • Rear Echelon Mother F---ers. People who lead from behind.

  • by cstacy ( 534252 ) on Sunday August 29, 2021 @06:50PM (#61742657)

    Not only should Google pay the employees what they are worth (regardless of location), they should pay them EXTRA for the cost of operating the at-home office. (Unless the employee can get the tax deduction and prefers that.) Office space, desk, supplies, computer and other needed gear, paper shredder, phone headsets and cameras, etc. (They can get away without the housecleaning fees for the space, if there are no clients going the house.)

    Most people working from home that I talk to are having to supply not only the space and supplies, but even have to buy their own computer equipment and high-speed Internet service.

    When I was a consultant, I rolled all that into my rate. And took the proper tax deductions. But employees are already on salary, and they didn't bargain for also supplying and maintaining an entire office. (And depending on various things, such as how "optional" this at-home office is, they might not be able to even get write-offs.)

    The employee should be paid according to the value of their work for the company, plus proper ffice expenses.

    Big companies are as a matter of policy always trying to screw the employees on compensation - this is just adding insult to injury. (Well, it's also adding injury to injury....)

    • by godrik ( 1287354 )

      Not only should Google pay the employees what they are worth (regardless of location), they should pay them EXTRA for the cost of operating the at-home office. (Unless the employee can get the tax deduction and prefers that.)

      Except that makes NO business sense.

      If I can get an American to do the job for $100,000 a year. But I find someone in Bengladesh who can do the same job, should I pay him $100,000 a year? A company is NEVER goign to do that, because the guy would also do it for $50,000.

      Compensation has ALWAYS been linked to location.

      What is "worth" is not a well defined quantity, it is a complex assessment that is made by both the employer and the employee until they agree on a number. There is not a magic formula that give

      • by redback ( 15527 )

        overseas workers are another thing all together.

        but what about someone in the bay area vs someone in utah? do you pay both of them $100k?

  • I mean: Google doesn't pay the electricity, cleaning, hardware, etc. to workers working at their homes and now Google wants to even cut their salaries?

    To what? To gain even more money?

  • by UID30 ( 176734 )
    No.
  • If Google can prove that they have unquestionably, formulaically and uniformly integrated estimated living costs into salary offers, then ya, decrease the wages for people who people who move out of the area. But if they just say that "we offered high wages assuming they'd live locally and have to pay ridiculous housing expenses", then no, they shouldn't reduce the wages.

  • Remember the old company slogan "don't be dicks?" Oh, that wasn't quite it. Maybe it should have been.

  • by Registered Coward v2 ( 447531 ) on Sunday August 29, 2021 @07:30PM (#61742779)
    A company I worked for decided as a cost cutting measure to cut the per diem by $5 a day and said “It’s not a pay cut and those of us in the HQ don’t get per diem” Yea, and you don’t travel from plant to plant and move every few years when a new one is built. Plus, we bring in revenue and you are overhead. Six months later they were asking why we all were quitting right after we got our annual bonus.
  • To say that a person's work is worth X when they live in one area and less in another is pure horse feces. What Google is really revealing, and Facebook too since they have also been toying with this notion to, do not really give a crap about their workers.

    Good thing there are other companies who will snatch up these people.

    So much for "Don't be evil"

  • So if I ... (Score:4, Insightful)

    by PPH ( 736903 ) on Sunday August 29, 2021 @07:45PM (#61742819)

    ... work remotely from a city with an even higher cost of living than SF, will I get a raise?

  • by CyberSnyder ( 8122 ) on Sunday August 29, 2021 @07:55PM (#61742865)

    to help make it affordable to live in certain markets - Bay Area, DC, NYC. If you are no longer living in those areas, you shouldn't get the differentials. You were being paid more living in the Bay Area than someone living in Topeka. Now you want to move to Topeka and keep the differential? Would the person originally in Topeka move to the Bay Area without getting a differential? Of course not.

  • by snowshovelboy ( 242280 ) on Sunday August 29, 2021 @08:02PM (#61742879)

    Assuming they ended their illegal no-call agreement [wikipedia.org], Is google willing to lose their remote employees to whichever FAANG company abandons regional salary adjustments first?

  • I disagree (Score:4, Insightful)

    by Sebby ( 238625 ) on Sunday August 29, 2021 @08:09PM (#61742911)

    If Google is smart, it will shelve this idea. So will Facebook,

    The less people that work at Facebook (aka Privacy Rapists Inc.), the better.

  • by Austerity Empowers ( 669817 ) on Sunday August 29, 2021 @08:27PM (#61742961)

    How about instead we all just pay a tax to bail out the corporate real estate market that is going to tank if we cannot somehow think of the billionaires?

    That's effectively what's being discussed: either come work in our overpriced building/city/area because we say so, or get paid less as punishment. That sounds an awful lot like a luxury tax. Maybe it's time to let the market crash. The US is absolutely full of underutilized land. There's really no good reason to force everyone into these shitty cities, it's making everything expensive and making our country less competitive. Let it fail. Ultimately land is and always will be valuable, there are jobs that will necessarily need to be "on-site" and the people that work there should not be paying arbitrarily high premiums for it. Things will balance out eventually as we rediscover how the world can work. Do we really want to keep this shitshow floating?

Think of it! With VLSI we can pack 100 ENIACs in 1 sq. cm.!

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