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I have a friend who's received an offer for $17/hour as a co-op in NY. My friend is a masters student in Computer Engineering doing advanced AI and machine learning.

I'm trying to figure out if this guy responding to my friend is out of his mind. Cause I scuffed at his responses.

In my experience undergrad students (2 years in) in software engineering get averages of $20 per hour in the area I live.

So I told my friend to ask for a higher salary, as they do have expenses and the nature of the work is more technical than a simple web dev job.

My friend sent an email to the hiring manager and the co-op office official. Asking for $22/hour and looking forward to the next meeting.

The co-op office official replied all to the email.

They said something like:

I understand your desire for a higher rate however the rate offered is comparable to what other co-ops get paid and cost of living has nothing to do with rate. I leave it to the hiring manager to decide.

In a follow up reply, my friend explained their financial picture more. And remarked that the nature of the work is different from an average co-op student. I'm assuming "other co-ops" means everyone doing them.

The co-op office replied again:

Your expenses have nothing to do with it!

The hiring manager hasn't replied yet.

Overall in my friends calculation, it's an additional $400. $1760 for two months of work (10 hours a week). Their expenses are $1322 a month.

What do you guys think? Do you think cost of living is excluded from the hourly rate calculation? And shouldn't be considered when negotiating wages?

I told my friend to ignore the co-op official and wait for a reply from the hiring manager.

EDIT:

My friend is graduating soon and a foreigner. The job offer looks like it is extended beyond graduation. But they have to go through the co-op office through school because of legal reasons.

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    I'm not sure what you're actually asking here but trying to make sense of this post it sounds like your arguing a particular position's salary by bringing up things like COL and personal expenses none of which may be relevant to the salary as far as the company is concerned. Do you imagine that a hiring manager would have any sympathy for a candidate who essentially says "I don't care what you've placed the salary for this position at, it can't support my lifestyle."? You seem to be approaching this all wrong. – Lilienthal♦ Mar 13 '18 at 15:27
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    In you title your ask a question that has nothing to do with your text. Sure there is a clear correlation between (general) cost-of-living and wages. No this is no suitable argument in an individual wage negotiation! – Daniel Mar 13 '18 at 16:10
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    This is yet another question about how to negotiate salary (for a student co-op) and should be closed-as-duplicate. It's offtopic (on Workplace.SE) to debate the relationship of cost-of-living and wages, forget about arguing that with the co-op office. She should find better alternatives, tell them her minimum and be prepared to walk. Sounds like they aren't going to offer more. – smci Mar 14 '18 at 2:48
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    @RonJohn not entirely true: cost-of-living has everything to do with salary. However it's not something the employer cares about, and in my opinion not something you should discuss with them or use as an argument. In a salary negotiation the clause following "I feel I'm worth ... because ..." should be related to your value to that employer (skills, experience) whereas in this case the friend just said "I should be paid more because I need the money" which is not relevant at all from the company's perspective. – CompuChip Mar 14 '18 at 9:32
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    Co-op is a paid internship. No one I know in the midwest US uses "Paid-Internship" everyone called it Co-op – Zak Mar 14 '18 at 12:36
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It doesn't matter what we think, it matters what the employers "think". And the beauty of a free market is that if your friend disagrees with what he's being paid he can simply look for new employment.

You're not going to make these people change their minds. They have some policy in place which pegs co-ops - regardless of competence, or field of study - at that wage, and I'm sure it suits them just fine. Why would they hand out more when people seem perfectly willing to work for $17/hr?

The ball is in your friend's court, and the only reasonable thing to do if he can't afford to live off of his wage is take his expertise elsewhere.

Edit #1: International Student Situation

You've now added the details of your friend being an international student, as well as having his wages paid though the university.

It sounds to me like your friend is stuck until he graduates 2 months from now, so it's rather too late to tackle this problem (although there is a small chance if getting some sort of bonus, so who knows?).

If he's interested in being employed by that company such that he will remain in the country, then he should probably rock the boat as little as possible. This might include not asking for a wage hike at such a critical junction in his life (about to graduate, and will presumably have to leave the country if a company doesn't sponsor him).

However, if he thinks that he'd rather work for some other employer then he should probably start looking for a job right away.

Edit #2: What is One Owed?

When asking for a raise your circumstances do not enter the equation as far as the employer is concerned.

An employer makes you an offer, which is what they feel that you are worth. This amount will always always be the minimum amount they can get away with paying you - cost of living, moving expenses, etc. don't figure into it. You could be living off of ramen noodles, and supplementing your meals from a soup kitchen for all most of them would care.

However, you're a human being with agency (free will), and - presumably - options. If you accept their offer then you're agreeing with their assessment of your worth. The employer owes you nothing at that point - you've already signed on the dotted line.

If, however, you feel that you're worth more, then you can negotiate prior to accepting, or look for other employment. However do not expect to get anything more than what you've negotiated into your employment contract.

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    @visc - the employer doesn't care, and shouldn't. The employer will pay the minimum necessary, and that's fine because you have the option to walk away. If an employer pays bottom dollar, they will attract bottom talent, and their product will bomb. That's the incentive for companies to pay good money for top talent - better, more reliable products, smoother, faster development etc. It would be best to realize that no one owes you anything in this world, and that you need to take life by the throat if you want to get ahead. Which is (partially) what your friend did when he asked for a raise. – AndreiROM Mar 13 '18 at 15:08
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    @visc Consider the number of unpaid internships that exist in major cities. There will always be someone willing to work for less, particularly when it comes to internships. The employer will always take the best deal they can get, and in this instance where they are required to hire through the university, they may not have any choice in deciding the pay rate. – David K Mar 13 '18 at 15:13
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    @visc, the employer also has the option of not hiring anyone. If the position is not worth more than $17/hour to them, that is what they will do. Your friend can take it or leave it. – Seth R Mar 13 '18 at 17:04
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    When an employer makes an offer, they may and often do take cost of living into account, depending on the field and the location. If you want to hire someone with 10 years of experience in IT and a security clearance to work in Northern Virginia, the "minimum amount you can get away with" will be enough to get candidates to move to a place with a high cost of living and work at your company instead of working someplace more affordable for another company. So it really depends a lot on the job market. It's wrong to think cost of living never matters. – Todd Wilcox Mar 13 '18 at 17:12
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    $17/hour in area for this kind of work as an intern is pretty low @visc "as an intern" that's an international student going through a coop? or just "intern"? "Locals" (aka: those not under visa restrictions), I presume, have fewer limitations and more flexibility... what other options are there besides this "coop"? All things being equal... I bet all things AREN'T equal compared to other "interns"... TLDR: are your comparisons truly equal? – WernerCD Mar 13 '18 at 17:45
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This is the message you (and your friend) need to burn into your psyche:

You are worth what the market will pay.

An employer (someone with cash in their pockets) has three choices. At the end of the day, do they want:

  • The cash in their pocket.
  • The work visc's friend will do for the cash in their pocket.
  • The work someone else will do for the cash in their pocket.

Those are the choices they have and the choices they make every day. Your friend's job is to make the second choice the most attractive choice.

If your skills aren't distinguished (recent grad), then you have to work for a little less cash, or be some other employer's "someone else" (3rd choice).

When your skills become distinguished (specialized knowledge, high productivity, leadership, etc.), then that second choice starts to look more and more attractive to employers, and you can ask for a little more of that cash.

NOWHERE in that list of variables employers consider are your (your friend's) personal expenses.

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    @visc - That's cash out of pocket. They would pay to relocate you if they felt they couldn't find equivalent skills at the same rate locally. You have to eliminate this idea that your personal situation somehow affects what you are worth as an employee. – Wesley Long Mar 13 '18 at 15:18
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    @visc - Your notion of how the world works will not serve you well. I am trying to help you. If you keep this idea that employers "owe" you something, you will not get far in life. This is from 30 years' experience. I can't (and wouldn't) force you to accept this. I am just saying you can learn this now from reading, or you can learn this over the next 10 years through pain. Your choice. – Wesley Long Mar 13 '18 at 15:24
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    @visc - Ah, to be as young as you, again ... You can argue all you want. The world cares not. I'm trying to save you some pain. If you want the pain, by all means, carry on. – Wesley Long Mar 13 '18 at 16:04
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    @visc, employers do not pay your cost of living, they pay what it takes to get you to work for them. Places like California and New York pay more, because the cost of living causes employees to demand more. Their alternative is not finding anyone to hire. They don't care about your expenses, just what it costs to hire you. – Seth R Mar 13 '18 at 17:08
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    @visc The cost of living is part of what you should use to decide if you want to work there. It doesn't place an obligation on the employer to pay you more. It may be smart for an employer in a higher cost of living area to pay employees more, as otherwise they won't get the candidates they want, but it imposes no extra obligation on the employer to the employee. – Yakk Mar 13 '18 at 17:24
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Should you consider the cost of living when you get an offer? Absolutely!
Does it influence salaries along with economy metrics? Sure.
Is it something you could use during negotiations? Rarely.

Sure there might be a couple of cases - perhaps your team is being relocated to a different city with a higher cost of living. Or you have the option to work in office A or office B and you calculate that the cost of commuting to office B is $100 higher per month so you ask for an increase if you pick B. But here's the catch, if you move to a different flat in 6 months and your commute costs decrease by $150, do you go back and request a salary reduction?

You are not paid to survive in the nearby area; you are paid to work. Imagine the reverse: you make an offer to work for X and the company replies: "We are sorry, here's our full budget, along with an estimation of the value you will contribute and the general economy forecasts. As you see, for our company to meet its goals and survive we need to hire someone at X/2". Would you be convinced by that argument? Because that's the argument you are making to them!

Furthermore, in a negotiation you aim to persuade. Even if an argument is perfectly valid, it is pointless if it doesn't work. They have indicated that they believe that your argument is invalid. Of course you can try to persuade them that it is, but it might also be easier to find a better argument: you've already mentioned that the usual rate (according to your experience) is higher, plus that the work is different from the average. Those are much much stronger points! Notice how they didn't stay that those arguments are invalid, instead they said that they have different figures.

In the end, there is no justification for asking for a salary X besides wanting salary X. You might have a lot of valid, persuasive reasons but nobody has to accept a deal they don't want; even if they are making the stupidest mistake.

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    I might listen if the CEO was drawing a similar salary. Hint: only startups ever do anything like that. In all other cases, the company is lying outright. – Joshua Mar 13 '18 at 19:35
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Your economics are false.

Fill a job is simple supply and demand.

A person that wants to live in a big city might be willing to work for less than living in a rural area. Yes it will be harder to make ends meet but cost of living does not directly affect salary demand.

I might be willing to take a low rate to work at a ski resort with high rent.

I might not be willing to live in rural North Dakota for any amount.

Houston has a fairly low cost of living for a big city yet many jobs still pay more than San Francisco.

Where cost of living may more fairly come into play is a transfer to a higher cost of living. You did not chose the city. But if you tried to lower salary based on move to a lower cost of living they would scream like banshees. I worked for a company that would give a one time bonus for transfer to certain locations.

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    Supply and demand also works in reverse. An area like Huston might have more jobs available so the pay is higher to attract workers. Whereas in a rural area, they might have lesser job pool but lesser pool of applicants so they need to attract from outside. Basically in NYC, applicants come to a employer, rather than an employer seeking out applicants. So if you don't like the pay, they see it that you can go elsewhere. – Dan Mar 13 '18 at 18:09
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    This should only be brought to the employer's attention if they try to relocate you, +1. But off hand, yeah, isn't that backwards? Isn't COL generally higher the denser the population... in first world countries. I'd assume in rural Indiana a gallon of milk is ~$2. ... 50 miles away in Chicago it's more like $4. – Mazura Mar 13 '18 at 23:24
  • @Mazura I think you assume wrong. Food and most product distribution is cheaper per product in a dense population. Like a car dealership that needs a lot of property per transaction is an exception. – paparazzo Mar 13 '18 at 23:34
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    @Mazura, that is certainly apparently true, but there are a lot more economic factors involved: for instance, I've never heard of rent control laws in rural areas at all, whereas they are common in urban settings. Rent control laws cause eventual shortage of affordable housing (by changing the incentives involved) and thus increase the cost of living. I recommend the book Basic Economics by Thomas Sowell. – Wildcard Mar 14 '18 at 1:49
  • @Paparazzo, I apologize. I did not intend to antagonize you in my response. – Stephan Branczyk Mar 14 '18 at 16:17
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There are two ideas being conflated here. One is the rate your friend should be able to get as a highly skilled student about to graduate. I agree, $17/hr for someone with decent ML or AI skills seems low. I think you are correct on that.

However, that matters not. Your friend's financial picture certainly does not matter to an employer. UNLESS your friend is in very high demand and is being actively recruited. But it seems that is not the case here.

Separate the two ideas. The rate and your friend's needs are not connected. Period. It is very unlikely they ever will be at this point with this hiring organization. That is the reality of the situation.

It seems like this question was asked to argue a dogmatic point and not to seek information on the situation. You are making broad, sweeping generalisations about complex, nuanced topics that people study for decades and still don't fully understand.

At the end of the day, if it really bothers you, it's like any programming problem. The best way to understand it may be to implement it yourself. Start a business and pay what you deem an appropriate wage for your talent. As Jeff Bezos says, " your margin is my opportunity".

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  • @Stephan yes perhaps I wasn't clear enough when I said that seemed low. I don't know the person so I can't say for sure but again, it seems low. The issue isn't the skills, the issue is the willingness of an employer to adjust pay due to COL it the area. As in my first sentence, it seems the two issues are being conflated in this thread. – red_squiggly_line Mar 13 '18 at 18:56
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    "The rate and your friend's needs are not connected. " This, pretty much by itself, is the answer. People are paid according to what they bring to the table, not what they need. – Andy Mar 14 '18 at 0:32
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    @StephanBranczyk, then the friend should accept one of the multiple offers of better-paid positions she is receiving due to the "super high demand" she is in. (What? There aren't any such offers? Then either she should look for them, or else what exactly do you mean that she's in "super high demand"?) – Wildcard Mar 14 '18 at 1:53
  • @Wildcard, It's a coop job. Most likely the friend just went to the coop office of her school and hasn't applied anywhere else. And like her friend advised, she just needs to ignore what the coop coordinator inside the school says and be patient enough to hear back from the hiring manager. And like some others have said already, she needs to apply to jobs without going through the coop office. – Stephan Branczyk Mar 14 '18 at 16:14
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    Please do not argue in the comments – Richard Says Reinstate Monica Mar 15 '18 at 14:22
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An employer sets the compensation for a job at what they think they must to attract and retain someone to do the work the employer wants done. Generally speaking the employer 'does not care' what a given individual's cost of living is.

It's for the individual applicant or worker to decide whether the offer is satisfactory - they might base that decision on their cost of living. They then decide whether to apply or negotiate.

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  • Yeah and what about health insurance? Employer doesn't care if its family or individual? Especially if they state they'll pay it? I mean cost of living is usually understood for an area. This why Californian engineers get paid more than NYS. It's cost of living. – visc Mar 13 '18 at 16:11
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    @visc, Throughout this page, you seem to have things the wrong way around. Californian employers of engineers are competing for engineers (in California, the USA and RoW). They have to make offers sufficient to attract and retain engineers, i.e. they offer relatively high wages. The higher the wages the more workers are willing to spend on rents. Rents increase, cost of living increases. – Lag Mar 13 '18 at 16:54
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    @visc You are FOS. I am an engineer and got several job offers out of college. The CA offers were the lowest (cause they could). My highest offer was in the city with the lowest cost of living. – paparazzo Mar 13 '18 at 17:04
  • @visc could you clarify your comment above? Regarding health insurance? Are you under the impression an employer will adjust compensation based on if a person has 8 dependents or 0? You mention NYS, are you drawing comparisons between employers in Buffalo and SF? It's not clear. – red_squiggly_line Mar 13 '18 at 22:50
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    @visc I guess me experience just has not been with the "lots of employers" that will "make adjustments based on what they know about you". I hope you and your friend can find warm, accommodating companies that fit this sentiment. Please update this thread when that happens! – red_squiggly_line Mar 14 '18 at 0:52
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If the people doing the hiring want to base your salary on what they think you need, then it may be a good approach to show your expenses to justify a raise. Not that no one hiring ever considers this, but it is really far down the line in priority for figuring out salaries.

It's usually some balance between what the market is for this candidate's qualifications, how this position contributes to the a company's income, and the amount of risk they want to take by paying more or less.

Some candidates ask for more or less depending on their understanding of all of these variables along with their level of desperation. Sorry, but if a couple of candidates have the same level of expertise as you do and are willing to work for half the salary, you may not get the job/raise no matter what.

Generally, I suggest demonstrating how you are much better than the other candidates and demanding what you can get on the open market.

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Most answers have covered working in a free market system, where your expenses do not dictate what the job will pay. Two entities are free to set their prices and when they agree, there is a deal.

I want to add additional perspective.

Compensation is measured in more than dollars

Job rates generally should factor in COL requirements, and generally you'll see higher rates in more expensive areas. However, compensation should to be measured in more than dollars. In your friend's case and many college student's cases their first jobs, internships, and coops will have sub-standard wages. But the wages are not the complete compensation. These companies are taking higher risk by taking on employees with little to no experience. There is going to be higher administrative costs per unit work of these entry level employees (more review, checking, grooming, mentoring, etc...) They offer you access to real-world on-the-job experience. That real-world experience is what is going to set you on a growth path for the rest of your career.

Your friend's compensation package (and other interns / coops) is something more like this:

  1. Base Wages
  2. Opportunity
  3. Experience
  4. Networking
  5. Travel / new city / new experiences
  6. Possibility of extension / offer of full-time employment.

If you can get more money, then go for it. But, in times like this, perspective is required. The opportunity to enjoy a new city, while getting paid a little bit, and gaining real job experience is likely worth much more than asking for a few more bucks an hour.

To conclude, everything is negotiable, and negotiating is part of the game. But to negotiate you must hold a position that is negotiable. An intern, co-op, or fresh grad doesn't have much leverage. It's best to take the opportunity, have a positive attitude and gain invaluable experience. Then next time you'll be in a better position to negotiate. Personally, I wouldn't squabble over a few bucks at the expense of a growth opportunity.

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