The article is critical of GitLabs model, not celebrating it.

What GitLab does is far more open than what you’ll see elsewhere, but the formula is actually pretty near to what most companies do already: Have pay bands for positions, and then a modifier based on the region, level factors, and some other inputs. Normally this produces a range, not a straight number, and then negotiations take place within that band (which is also why this information and formula is not typically shared).

As for the idea of paying a flat salary for a position regardless of where the person works, that is simply a non-starter for most companies, and essentially creates a race to the bottom to locate the region of the world that will produce qualified workers for the lowest possible salary possible. We as a society have no problem seeing fast fashion or other manufacturing that do this as being exploitive and evil, and this model is exactly the kind of thinking that drives that behavior. If we stop caring about where a person lives and instead look only at salary vs production, we will only ever hire in the absolute lowest cost of living places in the world capable of producing acceptable workers.

We need to look at this from another angle as well - Companies are buying labor, much in the same way that they buy raw materials, property, or utilities. When buying any of these inputs to your business, how do you decide how much to pay? Certainly you do not sit down in a board room and agree on a number and then go out into the world with that number and attempt to purchase what you need. You start by looking at what the going market rate for those inputs are. People, like materials, have some wiggle room in those numbers, and sometimes paying a little more will get you better quality or more reliability, so you will need to make decisions there to determine where on the spectrum you wish to fall, but never would you pay significantly more than market rate, nor would you be able to pay significantly below.

I see this kind of discussion constantly in the last few years, and often in terms of tying inflation to annual salary increases. “If inflation was 10%, why is my annual raise only 5%?” - because overall inflation was 10%, but the inflation in the cost for a person that can do your job was only 5%. It’s truly and honestly that simple. You are a commodity item that goes to the highest bidder - act like it.