Expats Get Paid More? Good. They Deserve It. Now Stop Complaining
Expats get paid what companies believe they’re worth. Here’s why that makes sense, and what locals can do about it.
Somewhere in a Southeast Asian metropolis, a local worker peers over at their foreign colleague, sees the slightly shinier laptop, the business-class flight reimbursement, the suspiciously well-maintained work-life balance, and a housing allowance. Outrage bubbles up. How dare they? The injustice of it all!
It’s an excellent question. A question that, for some reason, only ever comes up when someone else is getting paid more. When corporations nickel-and-dime local workers on salaries, benefits, and bonuses, it's called “cost-cutting.” But when the same forces of supply and demand dictate that a foreign hire is worth more? Now, it’s a moral issue.
Where was this sudden concern for fair wages when local workers were underpaid? Where were the indignant LinkedIn posts when companies fired long-serving employees to replace them with fresher, cheaper talent? But when capitalism benefits a foreigner, now it’s a scandal.
We all love the invisible hand of the market until it hands someone else a bigger paycheck. And that, is the true economic injustice: not that companies pay expats more, but that people only care when it doesn’t benefit them.
Expat Pay: A Scandal… That Follows Basic Market Principles
The Expat Salary Conspiracy is a devious plot where multinational corporations, notorious for their relentless pursuit of cost-cutting, inexplicably overpay foreign hires out of sheer generosity. Boardrooms filled with executives wringing their hands, saying, “Let’s ignore cheaper local talent and waste money on overpriced expats because, well, why not?”
Except, of course, that’s not how businesses work. If companies could get the same value locally for half the cost, they would. And they do, whenever possible. This isn’t an opinion; this is the same logic that has fueled decades of outsourcing, automation, and mass layoffs. If companies don’t hesitate to fire their own long-time employees to shave 1% off operating costs, why would they willingly throw money at foreigners if they weren’t getting something in return?
Expats cost more because they are worth more. They aren’t flown in for their charm. They’re hired because they:
Possess skills or knowledge gaps that don’t yet exist locally.
Have international experience that companies need to expand.
Offer global perspectives that a domestic workforce may not have.
Bring industry connections, niche expertise, or specialized knowledge unavailable in the local market.
And yes, sometimes, it’s about optics. That foreigner in a tailored suit leading the presentation? In some markets, that alone adds credibility. If that upsets you, I regret to inform you that branding is a thing.
So no, companies aren’t overpaying expats out of the kindness of their hearts. It’s just capitalism doing what capitalism does best: paying exactly what the market demands.
If Expats Didn’t Deserve Their Packages, Companies Wouldn’t Offer Them
Companies despise spending money. If you’ve ever worked for one, you know that suggesting a budget increase for anything is met with dread. Office chairs remain broken for months, coffee budgets are cut, and every dollar spent must be justified with at least three cost-benefit analyses.
So why, then, would these same penny-pinching corporations gleefully throw housing allowances, relocation costs, and private school fees at expats? What happened to their commitment to frugality?
Simple: because they have no choice.
Expats uproot their entire lives. That’s a logistical nightmare that costs money. Unlike locals, who can rely on existing networks, familiarity, and stable cost structures, expats need:
Temporary housing, because living out of a suitcase for six months isn’t an option.
Relocation assistance, because most people don’t wake up knowing how to rent an apartment in Bangkok or deal with Indonesian work permits.
Tax equalization, because moving abroad shouldn’t mean financial ruin at home.
Then there are the hidden costs of expat life:
Maintaining financial obligations back home (mortgages, retirement plans, insurances that don’t just disappear when you move abroad).
A built-in expiration date on their job, because unlike locals, expats are hired to be replaced eventually.
Basic survival expenses incurred navigating a foreign country, dealing with language barriers, and learning how to avoid getting scammed by taxi drivers.
This isn’t some corporate act of kindness. Companies don’t overpay expats out of guilt or misplaced generosity. They do it because without a decent package, no one would accept the job.
Expats Were Always a “Needs Must” Strategy (And Now They’re Disappearing)
Expats were never meant to be a permanent fixture in Southeast Asia’s corporate ecosystem. No government sat down one day and thought, “You know what this country really needs? A small army of foreign middle managers.” No, expats were always a means to an end, a temporary crutch to support industries while local talent caught up.
And now? That moment has arrived.
The days of expats being parachuted in to “teach the locals” are numbered because the locals figured it out. Turns out, sending Southeast Asian professionals to top universities abroad, exposing them to global corporate environments, and investing in local talent actually worked.
SE Asian professionals have studied at Harvard, INSEAD, and LSE, climbed corporate ladders, and returned with expertise once exclusive to foreign hires.
Industries have matured, meaning companies no longer need to import talent for roles that can now be filled locally.
Governments, always keen on reducing dependence on foreign labor, have introduced hiring quotas, stricter visa policies, and incentives for local employment.
And guess what? It’s working.
Expat salaries have been shrinking, benefits have been cut, and full-blown expat packages are being replaced by local-plus models. The localization experiment is succeeding, because economics did what economics does.
So, to those still frothing at the mouth over “expat inequality,” good news: your problem is already solving itself. Expats are being phased out, their salaries trimmed, their roles replaced by locals.
Not because of Twitter activism. Not because it was “unfair.”
But because the market said so.
Don’t Like It? Become an Expat Yourself
In free markets, supply and demand determine salaries. You, too, can become an expat and enjoy the salary premium you resent so much. Yes, really. There’s no secret handshake, no underground expat initiation ritual where we all sit in a dark room and toast to overinflated salaries.
Expat opportunities exist for everyone, including Southeast Asians. Plenty of professionals from the region move abroad to earn higher wages. There are Filipino nurses in the UK, Indonesian engineers in the U.S., Singaporean bankers in Hong Kong. And guess what? When they do, they become the “overpaid expats” in someone else’s economy.
But we never see outrage posts about a Vietnamese software developer making more in Germany than a local German coder. No one seems to mind when a Malaysian executive in Australia earns a premium. Why? Because deep down, everyone understands that skilled professionals are worth whatever the market is willing to pay, regardless of nationality.
So, if you’re a local worker fuming over an expat’s paycheck, here’s an idea: become an expat yourself.
Want a bigger salary? Develop global expertise, go international.
Want better perks? Find a company that values your skills enough to pay for them.
Think expats are overpaid? Go get a high-paying expat job and see if you still feel the same way.
You won’t. You’ll take the money, enjoy the perks, and suddenly “market economics” will seem like the most reasonable thing in the world.
The moral of the story? Expats are worth what they’re paid because if they weren’t, companies wouldn’t pay them. It’s really that simple. If a multinational corporation, an entity that will fire its entire workforce just to increase shareholder dividends by 0.2%, decides to pay an expat a premium, it’s because they need to.
Yet, here we are, with people selectively applying capitalism. When companies underpay local workers? “That’s just the free market, tough luck.” But the moment someone earns more than what’s considered “acceptable”? Now, it’s a moral crisis.
Sorry, but you don’t get to pick and choose when market dynamics apply. Either you embrace the system in all its ruthless efficiency, or you abandon it completely. But you don’t get to complain just because you’re not the one benefiting from it.
Think expats are overpaid? Go become one. If you can’t, then maybe the market is telling you something.
Brutal? Sure. But economics doesn’t care about feelings. And as long as companies still need expats, they will continue to pay them exactly what they’re worth.
At StratEx - Indonesia Business Advisory we work with employers to structure competitive, justified expat and local pay frameworks. Contact us for evidence-based compensation planning across borders and functions.