The premise is that an excellent developer can command a high price, whether remote or not. Some developers place a premium in remote friendliness, and thus allow a slightly lower salary for it, but only up to some amount.
I think that it's cause and effect issue. Developers who've proven themselves to be reliable and experienced can 'force' their preferences onto employers. And they happen to cost more as well. I don't believe that going remote magically makes you able command higher salary.
This comes up every time there's a talk about remote work. Why would a highly-talented coder accept this wage instead of looking for some other remote options?
I didn't see an important point that I think is relevant for fully-remote devs and correct me if I'm wrong: On-site benefits. If you work remotely, you can't use several of the benefits a company provides so a difference in the salary is common as a compensation for those.
Same for healthcare plans and taxes. A lot of remote workers have to pay those, which in many cases are completely or partially paid by the company, so a bigger salary is needed.
I don't mean this to sound snarky but remote developers are paid whatever they can negotiate.
If a company wants remote workers for "off shoring reasons", then pay will be low. If they want remote workers that are perfect for their needs, they'll pay what they think is fair and within their budget.
> Our latest survey shows that full-time remote devs get paid 40% more than never remote devs
Anecdotally, I would suggest the demographic of employees who work remotely plays a part in this. In my experience, employers are more willing to let senior or "better" developers work remotely than less ambitious, less productive ones who need more day-to-day managing. Since quality developers (senior or otherwise) are generally paid more, I would presume this contributes to a higher average salary for remote workers.
In the short term, with tons of well-funded or high-revenue companies struggling to hire, remote is a way to make your existing comp more attractive by opening it up to a new set of people and out-bidding their local employers.
In the long term salaries will likely equalize a bit, but maybe not that much. Even in today's tech hubs, the existing range of salaries is VERY wide. Not every dev in SF is making 300k+, and yet the FANG companies have been in an increasing comp arms race for several years.
I personally find it strange how gleeful lots of US developers have been about remote work. It means our US salaries are going to be untenable and we'll be paid like the rest of the world. Why pay a Silicon Valley salary when it's remote anyway and 1/4 the price to get someone from elsewhere?
> Also remote jobs will usually pay less because the supply is much higher, you compete with 100x more devs than the local devs, some from poorer countries where 20/h is a good rate.
Is there any data for this?
In my limited experience this was not the case but I've never really looked for a remote job
One possibility is that remote developers are just more productive (or if you prefer, more productive developers are more able to negotiate a remote working allowance from their employer). In standard economic theory, the equilibrium wage is at the workers marginal revenue product (or the marginal revenue that their work produces for the organization). So you would expect remote workers to either earn more because they are more productive or, if remote work makes you more productive, to earn more as a result of working remotely and being more productive
In a world where remote is an option, there really shouldn't be large differences in salary. In negotiations, the party who can most afford to walk away has the advantage. If there were a real dev shortage, devs would be in that position, but they aren't.
SV (and other markets) basically refuse to hire remote (and often refuse to relocate employees). This splits the market up into mini-markets where the slight oversaturation of devs allows the local market to dictate prices (under-saturation would boost salaries even in a small market). This is born out with the fact that those who do work remotely seem to have higher salaries for a given experience level (their market is much bigger and more diverse).
The obvious answer is unions. Joint negotiations would yield immediate effects. No large company could survive even a day or two of IT strikes without extreme losses. Unlike other jobs, you can't simply replace your staff because most of a company's software IP is held in the heads of its employees and is far too complex to decypher before the losses occur.
Cost-cutting measure don't just end at the office space level, they hire cheap developers too. There's quite a big divide between salaries they pay to their team in US and remote team and they get to do it just because they are "remote".
According to most employers I've talked to, cheaper salaries is usually not high on the reasons why remote. It's usually more access to more talents, etc.
I was lucky enough to get a great remote job that was happy to pay me as if I lived and worked in SF, but let me live anywhere I wanted to in the country.
Remote devs that have this arrangement definitely take home more money than their peers who live in more expensive zip codes.
But remote developers aren't the only kind of developers, and people do pay more for strawberries grown locally.
The remote developer market is a piece of the developer market, and the developer market pays more for developers in SF than in Topeka, same as remote strawberries cost less (often because cost of labor is lower).
As a remote dev, you're competing with other remote devs who can out price you. If I can offer someone else 10k less for the same product, why wouldn't I?
You can't really remove the selection effect of higher paid developers choosing to be remote by adding external controls. You could try using an instrument for remote work or use a Simultaneous Equation Model to remove the selection effect bias.
Counter to your analysis, I'd actually expect the pay premium for remote work would be negative simply because the opportunity to work remote is worth paying for.
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