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Socialism: set the going rate for people who work remotely from another area

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Co-Authored-By: Claude Opus 5.5 <[email protected]>
Claude-Session: https://claude.ai/code/session_01QWPs69B8nQZjtPEUXMKzZx
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jheaps
2026-09-26 04:14:18 -06:00
co-authored by Claude Opus 5.5
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JoshHeaps.Net/Content/Socialism/pay.md
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@@ -52,7 +52,7 @@ The model doesn't set anyone's pay. It makes sure pay is decided in the open, in
A majority vote can't protect a minority from the majority. So some pay decisions need **two majorities**: a majority of all members, and a majority of the members in the lower-paid half. They are: A majority vote can't protect a minority from the majority. So some pay decisions need **two majorities**: a majority of all members, and a majority of the members in the lower-paid half. They are:
- changing the pay ratio; - changing the pay ratio;
- any band whose top is above the 90th percentile of local pay for that job, or above three times the co-op's own median pay; - any band whose top is above the 90th percentile of pay for that job in the co-op's own area, for remote workers too, or above three times the co-op's own median pay. Where the survey gives no exact figure at the top, the highest figure it gives is used;
- any change that raises bands for jobs held by more than half the members. - any change that raises bands for jobs held by more than half the members.
These votes are by secret ballot, with at least 30 days' notice. That makes both kinds of grab harder: a skilled majority can't vote itself a raise over the heads of the lower-paid, and a scarce specialist can still be paid what it takes, if both groups agree. These votes are by secret ballot, with at least 30 days' notice. That makes both kinds of grab harder: a skilled majority can't vote itself a raise over the heads of the lower-paid, and a scarce specialist can still be paid what it takes, if both groups agree.
JoshHeaps.Net/Content/Socialism/the-long-run.md
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- **The going rate for each job** is the higher of two numbers: the median pay for that occupation in the co-op's own metro area, from the government's wage survey (the Bureau of Labor Statistics' [Occupational Employment and Wage Statistics](https://www.bls.gov/oes/)), or the local living wage for a single adult working full time, from [MIT's Living Wage Calculator](https://livingwage.mit.edu/). Both are measured per hour, so part-time work and consultants are compared fairly. The living-wage floor matters. In home care the median wage can be close to poverty pay, and a co-op that raises its aides to a living wage shouldn't owe anything for doing it. - **The going rate for each job** is the higher of two numbers: the median pay for that occupation in the co-op's own metro area, from the government's wage survey (the Bureau of Labor Statistics' [Occupational Employment and Wage Statistics](https://www.bls.gov/oes/)), or the local living wage for a single adult working full time, from [MIT's Living Wage Calculator](https://livingwage.mit.edu/). Both are measured per hour, so part-time work and consultants are compared fairly. The living-wage floor matters. In home care the median wage can be close to poverty pay, and a co-op that raises its aides to a living wage shouldn't owe anything for doing it.
- **Why a single adult's living wage.** In Salt Lake City in 2026, MIT puts the living wage at $24.64 an hour for a single adult and $41.55 for one adult supporting a child. An earlier version of this rule let pay up to one and a half times the second figure, about $130,000 a year, count as "raising the bottom." That would have let a co-op pay every cleaner six figures without the reserve getting anything. The single-adult figure, about $51,000 a year there, is still well above what most aides earn. Paying more than that is allowed. The reserve just takes its 30% of the difference. - **Why a single adult's living wage.** In Salt Lake City in 2026, MIT puts the living wage at $24.64 an hour for a single adult and $41.55 for one adult supporting a child. An earlier version of this rule let pay up to one and a half times the second figure, about $130,000 a year, count as "raising the bottom." That would have let a co-op pay every cleaner six figures without the reserve getting anything. The single-adult figure, about $51,000 a year there, is still well above what most aides earn. Paying more than that is allowed. The reserve just takes its 30% of the difference.
- **It's checked job by job.** Paying one group below the going rate doesn't make room to pay another group above it. An outside reviewer, the co-op's auditor or the bank's, assigns each person the occupation code for the work they spend most of their hours on, not their title, and the codes are shown to members next to each job. Where the survey has no figure for the metro area, the state figure is used, then the national one. - **It's checked job by job.** Paying one group below the going rate doesn't make room to pay another group above it. An outside reviewer, the co-op's auditor or the bank's, assigns each person the occupation code for the work they spend most of their hours on, not their title, and the codes are shown to members next to each job. Where the survey has no figure for the metro area, the state figure is used, then the national one.
- **People who work from home somewhere else.** More than one worker in five teleworked in March 2026 ([BLS](https://www.bls.gov/opub/ted/2026/22-6-percent-of-workers-teleworked-in-march-2026.htm)). The wage survey generally counts remote workers at the employer's reporting location, not at their home ([BLS survey instructions](https://www.bls.gov/respondents/oes/faqs.htm)). So the going rate for them still starts from the co-op's own area. What changes:
- **The floor can only go up.** Everyone is paid at least the co-op's figure. For someone who lives elsewhere, the living-wage part of the floor is the higher of the co-op's living wage and the one where they live. The minimum wage and wage laws of the state they work in apply too, including higher salary thresholds for overtime. A move that raises the floor counts from the day of the move.
- **The line for high pay can rise only for jobs hired as remote.** Suppose a co-op filled a job with a posting that advertised it as remote, and the person lives in a metro area where the survey's median for that job is higher than the co-op's. Then that person's pay counts as "above the going rate" only above their own metro's figure. So a co-op in a cheap area can pay what it takes to hire a remote engineer in an expensive city without the reserve taking 30% of the difference. A remote worker in a cheaper place gets no raised line.
- **Never for insiders.** Board members, officers and managers never get the raised line, and neither does anyone who switches to remote after being hired. "Go remote" can't be used to move insiders' pay out of the reserve's reach.
- **Fully remote means fully remote.** No more than 10 days a year at a co-op site, logged. Anyone who comes in more than that is held to the co-op's figures. The raised line is counted month by month, so it ends in the month someone stops qualifying.
- **It's checked, not claimed.** The auditor checks the home address against a lease or state and local tax records, and checks the site logs. The co-op also reports its share of pay above the going rate without the raised line, so any use of it shows.
- **The floor is what counts for tax.** The raised line only decides what the reserve takes. It isn't a claim about what pay is reasonable. The going rate that [the tax argument](taxes.md#wages-first) relies on is the floor.
- **Contractors and workers abroad.** Pay to contractors doing a regular job for the co-op, and to staffing or employer-of-record firms supplying workers, counts as pay under this rule, both for the floor and for the line. Workers abroad are held to the co-op's own figure as their floor, with no raised line, and the auditor checks their contracts and payment records. That largely rules out hiring abroad to pay less for the same job. It's a choice: the going rate exists to stop pay being cut because of who does the work, and where they live is part of that. It costs co-ops some hires, and a co-op in an expensive city will hire fewer remote workers in cheaper places for the same reason.
- **It counts total pay.** Employer retirement contributions above 6% of pay, bonuses, severance beyond two weeks' pay per year worked (up to 26 weeks), and perks like a car, housing or loans to members, valued at cost, all count as pay. So does pay to non-members and to people working through a related company, and the value of any deal with a member or their family on better than market terms, like buying from a relative's firm above the market price. Co-ops can't promise pensions or retiree benefits they don't pay for in full each year. - **It counts total pay.** Employer retirement contributions above 6% of pay, bonuses, severance beyond two weeks' pay per year worked (up to 26 weeks), and perks like a car, housing or loans to members, valued at cost, all count as pay. So does pay to non-members and to people working through a related company, and the value of any deal with a member or their family on better than market terms, like buying from a relative's firm above the market price. Co-ops can't promise pensions or retiree benefits they don't pay for in full each year.
- **How it's settled.** Thirty percent of the excess goes to the reserve, first out of the member's profit share for that year, before it's paid or credited, and then out of their [capital account](capital-accounts.md). No new cash has to be found, because the members already took that money as pay. Taking it from this year's share first avoids a second round of tax on money already credited ([How a Locked Co-op Is Taxed](taxes.md#capital-accounts)). If that isn't enough, the rest comes out of their future account credits, or out of their payout when they leave. For pay to non-members, it comes out of that year's members' profit pool. - **How it's settled.** Thirty percent of the excess goes to the reserve, first out of the member's profit share for that year, before it's paid or credited, and then out of their [capital account](capital-accounts.md). No new cash has to be found, because the members already took that money as pay. Taking it from this year's share first avoids a second round of tax on money already credited ([How a Locked Co-op Is Taxed](taxes.md#capital-accounts)). If that isn't enough, the rest comes out of their future account credits, or out of their payout when they leave. For pay to non-members, it comes out of that year's members' profit pool.
- **There's a precedent.** US tax law already treats salaries that aren't "reasonable" as disguised profit ([26 U.S.C. § 162(a)(1)](https://www.law.cornell.edu/uscode/text/26/162)), so owners can't dodge tax by calling profit pay. This rule stops the same disguise being used to dodge the reserve. The tax test is judged case by case. This one is a fixed formula, so it's cruder but much harder to argue about. - **There's a precedent.** US tax law already treats salaries that aren't "reasonable" as disguised profit ([26 U.S.C. § 162(a)(1)](https://www.law.cornell.edu/uscode/text/26/162)), so owners can't dodge tax by calling profit pay. This rule stops the same disguise being used to dodge the reserve. The tax test is judged case by case. This one is mostly a fixed formula, so it's cruder but much harder to argue about. The one judgment call is who counts as fully remote, and the auditor checks that against records.
**2. Gains from selling assets go to the reserve.** If a co-op sells a building, equipment, a brand or a patent for more than its value on the books, the whole gain goes to the reserve, not into the profit split. A sale to an insider, or a sale-and-lease-back, is checked like any [insider deal](pilot-safeguards.md#the-hidden-boss). **2. Gains from selling assets go to the reserve.** If a co-op sells a building, equipment, a brand or a patent for more than its value on the books, the whole gain goes to the reserve, not into the profit split. A sale to an insider, or a sale-and-lease-back, is checked like any [insider deal](pilot-safeguards.md#the-hidden-boss).