For example, a Google employee working remotely in Lake Tahoe would, according to Reuters, take a 25% pay cut for not working in San Francisco, even though the cost of living in some places in Tahoe are nearly as expensive.
The Reuters article also points out
that a staffer working remotely from Stamford, Connecticut, would take a 15% pay cut for not working in the New York City office.
“Our compensation packages have always been determined by location, and we always pay at the top of the local market based on where an employee works from,” a Google spokesperson told CNN.
But it’s outrageous that a company is cutting the salaries of workers who are likely to be more productive and less expensive than people working in the office.
In one 2015 study, Stanford University researchers found
that remote employees got 13% more work done, because their home offices were more convenient and quiet and they took fewer breaks and sick days. Research also shows that people who work remotely put in more hours. During the pandemic, Americans devoted 35%
of the time they saved on their commutes to doing their jobs, according to another study.
What about the popular notion that informal conversations around the office water cooler could lead to stronger teams and better ideas? There’s no evidence to support this myth, according to a recent report
in The New York Times. One researcher who teaches at Harvard Business School found that, in modern open-plan offices, many people wear headphones and try to avoid their colleagues so they can concentrate.
This means that, if anything, Google should be paying its employees who work from home more. Not only might they be more productive, but they also save the company the expense of office space. Remote workers pay for their work spaces themselves — including not just the cost of the space in their homes but also electricity, air conditioning, Internet service and cleaning. In the aggregate, this savings for the company stands to be vast. According to Google, about 10,000 staffers have applied to work from home or switch locations since June, and 85% of the requests were approved.
Google stands to save money by having workers go remote at a time when it’s already seeing record profits. Its parent company, Alphabet, just reported a staggering $18.5 billion quarterly profit
. So it’s unclear why it should refuse to pay staffers their previously agreed salaries.
But what’s particularly ugly about the decision is that it will likely disproportionately hurt women and minorities, who are most likely to work from home. According to a study
by FlexJobs, 68% of women prefer to work remotely, compared to 57% of men. This makes sense, since working moms also do the majority of the domestic work and childcare
in our families. Working from home offers more flexibility to juggle all these demands.
Black workers are also more likely to prefer remote work. A study
by Slack’s think tank, Future Forum, of knowledge workers who worked remotely during the pandemic found that 97% of Black staffers wanted to continue in a remote or hybrid environment, which they said improved their sense of belonging and helped them manage stress. By contrast, 79% of White workers preferred remote or hybrid work arrangements. And, among recently-hired workers, Slack says it has 50% more
minorities in remote positions, compared to those working primarily in offices.
Let’s also remember who is more likely to move away from the office to the suburbs, and therefore take a pay cut: families. While it’s true that real estate may be cheaper outside cities, people with children need to pay less for housing than their urban counterparts in order to afford more space, childcare and the other vast expenses that come along with raising kids.
Families probably didn’t plan on having their salaries slashed when they, for example, took out mortgages on their homes or enrolled their kids in the local Montessori preschool. For many, these kinds of pay cuts could be calamitous.
Some may question if it’s fair not to cut employees’ pay if they move to a less expensive city, particularly if workers originally based in the less pricey location have been making less money. It’s a reasonable question, and I understand why geography plays a role in salary. (According to Google, the company has always adjusted the salaries of employees who relocate, depending on where they go.) But the problem is that staffers who once opted for long commutes and lived outside the cities where their offices were located could be subject to pay cuts if they go 100% remote — even if they haven’t moved. That’s not fair.
No workers who have managed to do their jobs through a pandemic that has caused unthinkable stress and upheaval for us all deserve to take a salary reduction (especially since inflation has driven up the cost of many consumer goods
). But it’s particularly disturbing to see a company that is enjoying record profits claw back some of the pay of staffers who are poised to be more productive and save the company money. And it’s even more chilling when you consider that women, minorities and parents are most likely to take such hits.
It’s also a dumb strategy. In recent years, rising “techlash” — or skepticism of Silicon Valley — has made tech companies less desirable
places to work as Americans have grown more concerned about their social effects, like the ways they surveil us
and spread dangerous misinformation
Now, as Google and other tech companies cut salaries in a competitive job market, they may soon find that their staffers’ search terms include new jobs.