alt Hacker NewsYou can make the exact same argument about employers paying different rates depending on the country the employee is based in, and for all the same reasons.
Is there a good reason why a developer in Thailand or India should be paid less than their colleague who works on the same team, but is based in the US? Many companies believe so - there's a significant difference in the cost of living between those two employees, and employers believe it is fair to adjust the salary to provide a similar quality of life to both.
Equally, a person incarcerated in New York City doesn't have the same living costs as a person who has to live in New York City, so you could reasonably argue that any "Cost of living premium" that a company offers to NYC based employees doesn't need to apply to a person who doesn't experience those higher costs.
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Except prison has some very key differences from living freely in another state or country. You cannot leave and so don't have a choice about where you work. Even if cost of living is low in prison, you often still have to pay for being there and wages are far less than the cost. A prisoner will be released one day and their cost of living will skyrocket overnight. Do we want motivated hard working people leaving prison with nothing so they end up back in the same environment that got them there in the first place?
>Many companies believe so - there's a significant difference in the cost of living between those two employees, and employers believe it is fair to adjust the salary to provide a similar quality of life to both.
What a complete bs. If anything, in India it costs MORE to achieve a similar standard of living than in the USA. In India you can spend 3 times what a US worker gets paid - and you'll barely have enough money to get the same level of security that that worker gets.
Companies don't care, they pay the minimum amount that they think will interest the worker for long-term employment. And since in India or Thailand the workers don't have such a wide choice in work - they will be paid less, just enough to get them. And they pay the Americans just enough to get them, it is just happening that for Americans this amount are several times bigger. That's all here is.
> and employers believe it is fair to adjust the salary to provide a similar quality of life to both
That's bullshit. E.g. electronics cost the same in all countries.
> Is there a good reason why a developer in Thailand or India should be paid less than their colleague who works on the same team, but is based in the US?
Yes, and that reason is that people in most of the developed world are free to say yes or no to job offers based on their individual preferences. And, it just so happens, in Thailand and India there are many people who will happily say yes to offers that people in the US would say no to. The cost of living explanation that companies give is illusory; the reality is that they have to pay enough to get people to say yes.
Now, you might ask why people in different countries say yes to offers at different compensation levels. But I think the answer is self evident: people will say yes to offers when they believe that there are lots of other people who will say yes to it. Under those circumstances, saying no won't earn a higher offer but cause the company to give the job to someone else.
Ultimately, then, regional prices are set by what the locals are generally willing to say yes to.