They pay competitively for their location. Pay is determined by demand and supply. If you sort H1Bs by pay, the places with highest cost of living will get all of the H1Bs. Perhaps a better idea is to do the same thing, but on pay that is normalized against a cost of living index.
I don't think CoL indeces are relevant because salaries are based on how much value a developer brings to the business.
Suppose you have two jobs: $140k in NYC, and $100k in Dallas. If only one company can get an H1B, IMO it should clearly be the NYC company.
The NYC job will yield higher personal income federal income taxes. Also the NYC job is delivering at least $40k more value to the business than the Dallas job. This additional value again translates to higher corporate federal income tax.
I'm not sure what benefit the federal government has by favoring the $100k job, even though normalized for CoL ($1.5 NYC=$1 Dallas according to one index) the Dallas job is "higher paying".
Salaries are not based on the value a company gets, but on supply and demand of workers. If the said developer brings in $200k of value to me, but I can hire the developer for $100k a year in Dallas, then I am going to hire them in Dallas. The reason I am willing to pay $140k and hire in NY is because the same developer cannot be found in Dallas. So it is possible that the Dallas employee is actually more valuable to the company ($100k profit vs $60k profit), but they still have to pay more just because people are not willing to move to Dallas from NY.
Indexing on CoL will help is better distributing wealth across the country - think of the impact of $100k going into Dallas economy vs $140k going into NY economy. So there are some long-term benefits to the economy in general.
not true. for instance an employee at google hq vs a satellite get paid different based on market rate for developers in that locale. the companies pay based on market rate, not “theoretical value produced”. no one who works there thinks the satellite office engineers are producing less and plenty produce more profit for the company than ones who get paid more
> an employee at google hq vs a satellite get paid different based on market rate for developers in that locale
I agree but that doesn't fully explain the salary disparities. The employee at Google HQ is also worth more to Google than an employee in a satellite office, because the former will communicate more efficiently with the rest of the organization.
That argument might seem ok if you compare satellite vs. hq (tho I doubt that's actually true), but breaks down if you compare two non-hq offices (e.g. Boulder vs. Zurich).
i actually don’t think it’s ttue at all having worked at the hq and seeing people from ny and la and zurich offices. there really wasn’t any difference in value
The salary is a proxy for how valuable a job is to the economy. So sorting by salary effectively awards the visas to arguably the most valuable jobs. Also, federal government maximizes it's tax revenue from the visa holders when the visas are awarded by salary.
not true. if company X has a satellite office in low COL area. each engineer produces the same value but gets paid less therefore the company has more profit. and govt gets more corporate tax.
> Perhaps a better idea is to do the same thing, but on pay that is normalized against a cost of living index.
Why? The current pay is determined by current supply and demand, but that doesn't make the current supply and demand desirable. If H1Bs are sorted by pay, all companies may learn to raise their bid.
