In his blog post How Much Do You Cost?, Yegor Bugayenko describes the rules he uses to pay people working remotely for him (emphasis is mine):

It is a common practice to pay higher rates to those who live in more expensive countries. When I'm getting resumes from San Francisco programmers, their rates are $70+ per hour. The same skills and experience cost $15-20 in Karachi. The reason here is the cost of living — it is much higher in the US than in Pakistan.

However, this reason doesn't sound logical to me. If you're driving a more expensive car, we have to pay you a higher salary? The same with the place to stay. You've chosen the country that you live in. You're using all the benefits of a well-developed country and you're paying for them. It's your choice. You decided to spend more money for the quality of your life — what does it have to do with me?

This argument can be reformulated as:

If what I pay you doesn't allow you to live according to the standards accepted by your community, you can always move to a cheaper place or country.

I don't like this argument. Most of us would face various obstacles if we tried to follow this advice.

  • We have a spouse who has a job which he can not leave.
  • We have children that we can't just take away from their friends.
  • We have older family members to care for.
  • We are not accustomed to the culture of a country with lower costs and standards.

I think you can all add to this list.

What do you think about Yegors argument? Is it a fair argument? Can we accept it as a valid argument or should we reject it as being cynical?

  • No. I am asking if it you think it is cynical for an employer to tell potential empoyees to move to Karachi. – user36910 Jun 10 '15 at 11:37
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    He does not ask people to move to Karachi. Especially not people he already employs. All he says is that for 100$ he gets more from a guy in Karachi than from a guy in the US. That's not cynycal, that's a fact he has established. That said, I think that every other argument he makes is plain self-righteous bull, so I would not give too much on this passage about location. – nvoigt Jun 10 '15 at 11:41
  • Just read those article, your emphasis really make him sound like a douche. It is simply saying which one is cheaper and not "what does it have to do with me?". – kirie Jun 10 '15 at 14:49
  • who would get out of bed for $70 an hour? if you're living in the USA, it costs, what, $2000 a month right off the top to cover healthcare. bizarre. and the idea of hiring someone for "20 dollars" in Karachi - (where most of the best talent is) - was this written in 1950 or something, what? – Fattie Jun 7 '17 at 17:51

Companies are not welfare organizations. They follow economic goals, namely making money. As such, they should pay their employees what they are worth to the company.

If the developer from Karachi can deliver the same value to the company as the one from the bay area, then it's in the companies best interest to hire the guy from Karachi if he costs less.

The point is that "everything else being equal" is rarely if ever the case. No two people are equal. If the guy that costs more can bring things to the table that are worth more to the companies bottom line, he is worth more money.

Balancing cost and gain, risk and reward is what differenciates propering from failing companies. There is no single recipe for this.

  • My question is not about if the company shall hire the guy from the expensive or from the cheap country. It is about if the argument quoted above is accaptable or even practical advise. – user36910 Jun 10 '15 at 10:25
  • Factually, there is nothing wrong with his arguments. It seems like you want my opinion on the piece. Well, that's out of scope for this site, we are a Q&A site and there is no correct answer if you ask for peoples opinions. – nvoigt Jun 10 '15 at 11:16

First, I don't think he got his numbers right. For $15-20 you don't get top-notch experienced senior developers in Pakistan, too.

But to answer your question (is this cynical or a fair argument?). It clearly is cynical. I think the following sentence from his blog post transfers the main message of the whole post:

Thus, we prefer to work with people whose expenses are lower. Our money will simply work better.

So he states himself that the main reason to hire developers from Pakistan is for financial reasons. It's not about the developers or where they live, cost-of-living, etc. It just comes down to how his company can make more money. The rest of the post is basically trying to justificate that it's okay to do so.

IMHO regarding that he is himself from the Bay Area (and I guess he gets more than $75/hour out of his own company) I find it a rather stupid point and bad move to tell people to move to Pakistan.

As you already pointed out, obviously:

  • You don't choose the country you are born to (and in most cases the country you are living in - if that would be the case, 95% of the Stackexchange members would live in the Bay Area wouldn't we?).
  • He should just fairly admit: "This is cost optimizing - we do it to make more money!". After all and to be fair that is what companies are founded for.
  • Re living in Bay Area: If more people could (= were allowed to) work remotely, as I do, the Bay Area would be considerably less crowded. I'm a good example of Bugayenko's point: I live where costs (particularly housing costs) are a fraction of Bay Area prices, so even though my rates are perhaps on the low side for Bay Area talent, I effectively make more per hour. – jamesqf Jun 10 '15 at 19:37