Comments
Nice one George. Some thoughts:
- My naïve intuition is that it would be good for many EA orgs to decentralise further and/or move bases out of expensive areas, due to lower operating costs and I think better optics leading to greater cost-effectiveness. But after considering that many smarter and more knowledgeable people think otherwise, I would be slightly surprised if this intuition was correct (having tried to comprehend everything in a GiveWell model, I can see the benefit in people regularly being in the same room).
- Would you agree that location vs value-based is a false dichotomy and they represent two extreme ends of a spectrum? In reality, I understand the majority of companies benchmark using local competitive rates, but this does not have to be the case. My intuition leans towards a norm of using both location and value-based components in deciding salary. This would mean a worker based in San Francisco would be paid more than one in Nairobi, but less relative to local cost of living.
- On #5, I think these salaries need to consider averages, not exceptions. Also, I believe it is greater job opportunities that lead to organisations needing to set higher wages.
- The example of the Kenyan employee effectively redistributing their disposable income seems a bit idealistic to me. Offering high wages for the region would attract a greater proportion of less-altruistically minded people who would not necessarily redistribute generously and impartially. In addition, GiveDirectly (and other NGOs) have developed their own ideas on how these funds could effectively be used. Even with the individual's advantage of being in the region, the NGO must view this as an expected cost to their broadly-defined goal of global development. There are likely overall benefits to the NGO in terms of image and employee morale, but (I think) not in the explicit benefits from philanthropic investments made by the individual.
To repeat myself a little. Thanks for the post and perspective. My admittedly uniformed hunch is that it would be great to see more EA-aligned orgs hiring remote workers in less developed and expensive regions. I think ideal remuneration for the positions would involve location and value-based components.
Thanks for the post nice one! I appreciate the thought process and strongly upvoted, but strongly disagree with this argument.
I live in Uganda, and (disclaimer) am a strong advocate for the opposite - for NGOs to pay their workers less, and even wrote about it 5 years ago.
Here are my arguments specifically against this (aside from the general ones George already mentioned)
1. The extra money won't get given away. We already have strong evidence that paying high salaries for "do gooding" jobs doesn't attract do-gooding people. NGO workers here earn the highest salaries already, and there is no association between people wanting to do good and these working for an NGO - These are simply the highest paid jobs and everyone clamours for them. Many people even pay bribes to get the jobs in the first place. There's just no way you will be able to ensure that the people you pay the very high salaries are likely to do good things with the money.
2. Cost of living should be considered. A $40,000 salary in New York might give you $0 disposable income, whereas in Nairobi it might give you $30,000. I think to some extentwe do have to pay living wages based on context. I think its better to take advantage of the lower cost of living, and for EA orgs to spend money more effectively by hiring more people from low income countries.
3. I'm not sure there is a meaningful culture of "earn to give" from a truly "effective altruism" perspective yet in Sub-saharan Africa. People are extra-ordinarily generous and donate large amounts of money to lots of local initiatves and to struggling family members which is fantastic, but I haven't yet met anyone here in Uganda at least who aims to fund the "most effective" charities. I think resources to build EA these ends might be better spent on EA community building in capital cities, rather than on higher salaries. I would be interested to hear from George if he is part of an EA community which has members who give a lot of money away to effective charities
4. You could easily cause counterfactual harm by pulling someone away from a more important job. If you offer 70k salaries here, you really will get the best of the best applying for that job. The kind of people that could be local Governers, or running effective local businesses that employ a lot of people. Unlike in high income countries where there are many jobs with higher salaries and more prestige, jobs with these kinds of salaries in places like Uganda barely exist. If you actually hire the best candidate, there's a decent chance that they were already doing a job with influence and power which might be higher net good than the EA job, or that they were planning on doing something higher net good in the future.
5. Effective use of money - get 3 for 1. Why pay for 1 EA job for 60k and hope that someone will give away half of it, when in Uganda you could pay 3 people 20k, still get amazing quality workers and get almost 3x the EA work? (or less, that's a HUGE salary here). This might seem like the obvious alternative to paying one higher salary, but I think its still worse saying
Two side notes
First side note, I don't like the negative "black tax" framing of the cultural norm of rich people generously sharing money with worse off family members. It seems to me am unnecessarily negative framing of a hard and messy yet often beautiful cultural norm. Richer Ugandans share a LOT of their income with poorer family members yes, to pay school fees and medical bills and other important things. A lot of the time (especially when the money is going to very poor family members) this can actually be a very effective use of money - often well targeted and of course with no overheads. This so called "black tax" can often be a better use of money than either if those richer people spent the money on themselves, or if they gave to the plethora of largely useless NGOs here.
Second side note, the OPs suggestion to provide "income to fund local entrepreneurs who have innovative ideas for improving the lives of the poor." is not necessarily a good use of money. There's not good evidence this is an important cause area, nor is it neglected - very many NGOs already fund entrepreneurs in East Africa, I'm not sure we need more of that.
Thanks Nick for the insightful comments you've shared! I greatly appreciate your well-thought-out perspective. I would like to address some key considerations based on your points:
While the term "black tax" may sound negative, I personally view it as a positive phenomenon based on my own experience as a beneficiary of financial support from my well-off extended family. I have had the opportunity to attend conferences outside Kenya solely due to their generosity. Therefore, I believe that targeted financial support within families and communities can be an extremely beneficial force.
Your concern regarding the sustainability of communities after NGOs cease their activities or funding is no longer available is valid. Often, when NGOs implement successful programs, such as feeding initiatives or distributing mosquito nets, communities struggle to maintain those advancements once the programs end. I share your belief that entrepreneurship should continue regardless of external funding. It is through a combination of financial resources and locally developed solutions that many of the challenges in Africa can be effectively addressed.
Thank you again for your thoughtful comments. Your insights have added depth to the discussion, and I value the opportunity to engage in this conversation.
Lots of good points here!
Just to isolate and respond on the "black tax" comment: The perspective I have heard from talking to Kenyan entrepreneurs about this is I have a familial financial obligation that expat entrepreneurs do not have. It prevents me from being as risk-taking as I might otherwise be
Here is a direct quote from an entrepreneur I interviewed for a project: "there's so many cool, really smart Kenyans and local entrepreneurs. But then there's the sort of like 'black tax'. It's family, and there's all this stuff. And the pressure to make it I think, pushes people to more safer choices, as opposed to picking something that's a little bit more high risk"
Whatever you might think about the effectiveness or the cultural value of this expectation, I think the term "black tax" does capture that this is a financial obligation for some.
This is a secondhand viewpoint - I am not black nor African. I'd love to hear opinions on this from people with firsthand experience.
Thanks for the response man, the phenomenon 100% holds back entrepreneurs, I've heard that many times as well and agree with that! And its definitely an obligation no disagreement there which I agree "black tax" captures.
My inclination though is that despite that the obligation may actually well be net positive, as it forces many people to spend money on things which are better for the world than if they spent them it on themselves.
The obsession with entrepreneurship here is very interesting, its a huge discussion we won't have right now but I've got mixed feelings about whether its necessarily something that leads to good outcomes and should be strongly encouraged.
Nice one.