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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:

  1. Regarding the remuneration system, it is indeed debatable whether most of the extra income would be donated. I understand your viewpoint on this matter. However, I believe a more nuanced approach is necessary when designing remuneration systems. Organizations should strive to encourage their employees to contribute a portion of their additional earnings to effective charities, such as 10%. This approach becomes especially important in areas where Effective Altruism (EA) is not widely embraced.
  2. Considering the cost of living is essential, and it would be unfair to disregard its impact. I agree that an employee's location and the associated cost of living should not be used against them, particularly in low-income areas.
  3. I acknowledge your observation that the giving culture in Kenya, where I am currently located, may not be as prevalent in other African countries. It would be presumptuous to assume a uniform situation across all African states. Efforts are underway within the EA Nairobi and EA JKUAT communities in Kenya to expand the reach of EA and foster a stronger giving culture. While I cannot provide specific details on the donations made by EA Nairobi, it is an area I am personally interested in exploring further.
  4. Concerning the impact of attracting professionals away from their current impactful jobs, I respectfully disagree with your perspective. In the long term, I believe it is crucial to provide professionals in Africa with equal opportunities to compete for impactful positions. Additionally, a significant number of highly competent and dedicated individuals are already working on effective causes, and this trend is not expected to diminish anytime soon.
  5. In terms of cost-effectiveness, I agree that allocating extra funds to employ more highly skilled individuals is important. However, it is crucial to ensure that employees receive adequate compensation to prevent a situation where their productivity is compromised due to unfavorable conditions resulting from low salaries.

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.

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 Scott for your comment and thoughts!

  • I truly appreciate your perspective on the decentralization and relocation of EA organizations. It's an interesting idea that many of us might instinctively consider beneficial due to lower operating costs and potential improvements in optics and cost-effectiveness. I think it is important to acknowledge the diverse viewpoints of experts in the field, who may have a more nuanced understanding of the situation. Having looked into the GiveWell model myself, I can comprehend the value of having people regularly gather in the same physical space for collaboration and synergy, which might not be easily replicable in a decentralized setup.
  • Regarding the interplay between location and value-based considerations in salary determinations, I agree with your notion that it is not a matter of choosing one over the other. Rather, it's about finding a balance and establishing a norm where both factors are taken into account. While it is common for companies to benchmark salaries based on local competitive rates, your intuition of incorporating location-specific and value-based components resonates with me. This approach would ensure that a worker in a city like San Francisco, for example, receives a higher salary than someone in Nairobi, while still accounting for the local cost of living.
  • Your emphasis on considering averages rather than exceptions when contemplating salaries is noteworthy. It is essential to look at the bigger picture and consider the overall job market and opportunities available. Organizations often find themselves needing to offer higher wages due to competitive factors, as they strive to attract and retain top talent in the field.
  • Regarding the example of a Kenyan employee redistributing their disposable income, I understand your skepticism. While offering higher wages in the region might attract individuals who are not as altruistically inclined and may not generously or impartially redistribute their income, it is crucial to examine the broader impact. NGOs like GiveDirectly have developed their own strategies for effectively utilizing funds and addressing philanthropic goals. Even if the individual's philanthropic investments may not directly align with the NGO's objectives, there can be overall benefits in terms of organizational image and employee morale. It is indeed a complex balance that requires careful consideration and evaluation.

By incorporating both location-specific and value-based components in remuneration decisions, we can strive to strike a harmonious balance. I find it crucial to approach this endeavor with empathy and an understanding of the potential implications, ensuring that the overall impact aligns with the organization's goals and respects the humanity of all involved. Once again, thank you for sharing your valuable perspective.

I read it and I liked it. I have questions though; whilst it looks 'fair' on the face of it to pay everyone the same salary, don't you think the aspect of locations should be considered? I mean, what if we paid the same amount of salary to people working the same job but different hardships, would it be fair? We do not consider whether their lives are in danger or not? What if these differences in salaries are actually incentives to encourage people to work in rather expensive or hardship locations?

I think this viewpoint is an important aspect to delve into, but you may benefit from other sources I have included in the post. Some thoughts on your comment:

  • While it may seem "fair" to pay everyone the same salary on the surface, it is crucial to recognize that different locations can entail varying degrees of hardships and challenges. Ignoring these differences could lead to a lack of fairness in compensation. It would not adequately account for factors such as danger, safety concerns, or the cost of living in different regions. I have made some distinctions between living in NYC and Nairobi - very different conditions for employees working in the same organization.
  • I actually think offering higher compensation for positions in expensive or hardship locations can act as an incentive to attract and retain individuals willing to work in such challenging environments. It recognizes the additional burdens they face and compensates them accordingly and can help address the inherent inequalities arising from differing circumstances.
  • It is important to strike a balance between promoting fairness and incentivizing individuals to take on difficult assignments. By taking into account location-based factors when determining salaries, organizations can acknowledge the varying hardships people face, ensuring that they are appropriately compensated for the challenges they encounter.

It is obviously a delicate balance that organizations need to navigate, considering both fairness and the need to provide incentives for individuals to work in challenging locations. Thank you again Tekin for raising these thought-provoking questions.

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