> why should they pay me less or more dependent on variables external to my actual work.
They won’t pay you more in the long term. In the short term, they may be trying out candidates willing to work for cheaper. If they notice cheaper employees are available and providing the same utility, then I would bet the more expensive employees are on the chopping block.
> Shouldn’t a company pay what a job is worth to them
No, they pay just enough for you to accept working there. If your alternatives are worse than your colleagues because you don't have high-paying local options, you'll be paid less.
Most firms will pay less for remote workers. It is a little odd given they save a decent amount of money, but most people save a lot of time by not having to commute and they like the flexibility so the rates for remote workers are lower.
> This is a self inflicted problem across all companies. As long as companies are not willing to pay the market salary, people will move elsewhere.
Why do you say this? Surely underpaying people is one way to make them leave but not the only reason. Some people think “the grass is always greener” elsewhere. Others don’t last long because they are not easy to work with. Others are not great employees and so are encouraged to move along sooner rather than later. Lots of possible reasons. Most do not signal the type of person I want to hire.
> They justify paying you less for the same work because of your location. So you are as qualified as someone else but make way less.
And you can know this thanks to the transparency and it help to make an informed choice. And if this policy prevent them from recruiting good worker, they will change it.
In a non transparent setup, they could be doing it a none would be wiser.
> Every place I have worked needs me more than I need them.
If this is actually true, in any situation where this happens, you are being underpaid, because it implies the employer is getting more out of your employment arrangement than you are.
I know what you meant, it is just the semantics of economics are precarious and a lot of people would fight tooth and nail to be in a position to bargain for more because of a situation where an employer values the worker much more than the worker values the employer. You want equilibrium where the worker gets as much from the employer as they can, which is when employer and work both get as much out as one another.
> It should be about the value I bring to the company
Your salary has never been even related to the value you bring the company. That is just the absolute maximum they're willing to pay. Your salary is the lowest your company thinks they can pay to get a suitable employee. They pay remote workers less because there are remote workers willing to work for less, simple as that.
> Cool, but then you end up with less money overall.
Highly debatable, because in the real world you need to do multivariate optimization and most people can't (don't have the skills and/or desire) to be constantly optimizing their salary. Thus, choosing a company that is actively trying to fairly compensate existing employees tends to pay off in the long, on multiple fronts, not just immediate salary.
> All that means is the candidate won't get the offer if he's not worth the bottom end of the range.
How is this different from the status quo? If you don’t get hired for a specific position, it means the company didn’t think you were worth the salary for that position, whatever that might be.
> Some people are simply more productive in the same job as other people. Why shouldn't they get paid more?
They absolutely should, and I didn’t mean to imply otherwise. I meant “pay discrepancies that would foster resentment,” i.e. undeserved discrepancies.
> Because people aren't stupid and when they realise they're being paid less than they're worth they'll leave, and then you'll have to go through the pain of recruiting someone else.
I just took a 20% pay-cut to go work somewhere I thought I might like. There is more to a position than the compensation package.
>On the other hand, everyone would love to hire someone who produced 10x their compensation
If there was somebody out there who was half the price and produced 20x their compensation they would be less impressed and would probably credit themselves for producing most of that value.
> The idea that you can perform poorly if you are paid less is not really true.
Can confirm from my experience. The greater the salary, the better the working conditions. Companies that paid as little as possible also tried to squeeze out as much work as possible.
> Your future salary expectations likely have a basis in your current salary.
Not necessarily true. My future salary expectations (or _needs_) may have to do with a previous salary, my cost of living, my recent experience or education, or my financial situation.
I've worked in different cities with different COL and also taken cuts in a down-turned market. My current employer is getting a bargain.
If I apply for a job and am asked for this information, I may say, I make $X but I need $2X for reasons A, B, C.
This benefits me because the response tells me if I am out of their range or if they can help me pay my bills, potentially.
> If you are leaving a place because of bad pay or just that you want to make more money the discussion was always tethered around your previous pay.
The employer wanted you to think that, but it was actually tethered around your other job offers and your willingness to say no.
If you have access to information for what other employers are paying, and are potential other options for your employment, the employer will know you know this.
More importantly, you will not have to waste your valuable time figuring out what other employers are paying, so you have to do less work to figure out the market.
The employer most likely already knows the market, that is part of their daily duties, and know that applicants have to do a lot of work to figure out the market. Hence trying to use people’s previous pay to lowball them, since they know that people only know that.
> Why are you hiring a $150k candidate to work on X if a $100k candidate can work on X?
Because the world isn't black and white. There could be soooo many different reasons why you're willing to pay one person a lot more than someone else to do a job.
> employees might more likely to quit a company that generally pays other employees poorly
For me, finding out that my more skilled colleagues make more money than me would be encouraging. It would mean that if I learn more, I could possibly get a raise.
The bad news is to find out that the people whom I admire because of their god-like skills actually make the same money as I do. That means that I have most likely already hit the financial ceiling.
They won’t pay you more in the long term. In the short term, they may be trying out candidates willing to work for cheaper. If they notice cheaper employees are available and providing the same utility, then I would bet the more expensive employees are on the chopping block.
reply