Monday, August 15, 2022
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ought to workers be paid in a different way based mostly on the place they reside? — Ask a Supervisor


It’s the Thursday “ask the readers” query. A reader writes:

I’m interested by your ideas on a query among the smartest folks I do know basically can’t agree on: ought to a wage be based mostly on the worth of the labor, or the subsistence of the laborer?

For context, I lately left my final job after 5 years — a big nationwide nonprofit with aggressive salaries in a excessive cost-of-living space. Previous to Covid, in-person work was very a lot the norm, and most workers lived inside commuting distance. In the course of the pandemic, the overwhelming majority of workers went absolutely distant, apart from a couple of designated “on-site important” technical employees. When it turned clear that Covid wasn’t going away, the corporate shaped a committee (that I served on) to assist give you equitable insurance policies that may mirror the “new regular” of versatile and distant working for the longer term.

Whereas evaluating the monetary implications of distant work for the corporate, questions round wage got here up, and sharply divided committee members’ opinions. It boiled all the way down to: If an worker residing in a high-cost space was employed at a sure wage, elected/bought authorized/was required to start performing work remotely in the course of the pandemic, then selected to maneuver to an space with a decrease value of residing — with no different adjustments within the phrases of their employment — ought to that worker be requested to take a pay lower? Suppose Google vs Reddit.

Rationalizations in favor:
– Location-blind salaries might create a perceived inequity between distant positions and hybrid/in-person positions, with distant workers capable of get extra “bang for his or her buck,” so to talk, by shifting to a less expensive location that wouldn’t be attainable for an worker that should commute.
– Labor is already regionally banded throughout many (if not most) industries — a undertaking supervisor in Arizona is just not going to make the identical wage as a undertaking supervisor in NY — so the “market worth” of a job adjustments when workers transfer.

Rationalizations in opposition to:
– A wage ought to be based mostly on the worth of the labor being offered to the corporate, not what it prices for any given particular person to outlive whereas performing that labor; you’re paying for work, not an individual.
– It’s inequitable and demoralizing to pay workers in a different way based mostly solely the place they reside. And the place does that calculation finish? At a state stage? Metropolis? Zipcode? Is is honest to pay residents of poorer neighborhoods lower than these in rich neighborhoods, as a result of it’s cheaper to purchase a home there? Looks like a minefield of DEI points at play in that analysis.

Actually, I’ve heard actually compelling arguments on each side of the coin. On precept, I firmly consider in paying folks what their work is value, it doesn’t matter what. However real-world utility could make issues actually bushy in follow, and I do know it’s not at all times useful or clever to disregard actuality in favor of precept.

I actually don’t know; such as you, I believe there are compelling arguments on each side. So let’s throw this out to everybody for opinions within the feedback.

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