[davidf560]

Maybe this is overly simplistic, but won't this all work itself out over time? More companies refuse to pay inflated SV salaries (note: most companies in the world already do not employ people there anyway), so some of the concentrated SV talent leaves for other places like Chicago where they can still get a sufficient wage relative to the cost of living. This continues for a while and eventually the COL in SV will start to equalize with other places in the country like Chicago, won't it?

Perhaps the real message here is that SV companies are realizing this is a perfect way to get out of paying $300-500K salaries for jobs that are more like $150K anywhere else in the US. It's kind of like the outsourcing craze from 15 years ago, except instead of getting 3-5 developers for the price of 1 by going to Europe or Asia, SV companies can get 3-5 developers for the price of 1 that are still US-based and only a couple of timezones away.

As someone who doesn't live in California but still near a big city in an area that is still "expensive" (but nowhere near SV prices) relative to smaller towns and rural areas, I can't figure out if this remote shift is a good thing or bad thing for me yet. I fear that my suburban house will be worth less going forward because proximity to a major city may be way less valuable now if so many fewer people ever physically go into work anymore.

[deegles]

It's a big assumption that SV wages are inflated given the value that sector has generated for the economy. Facebook made around $600k in profits per employee.

I will agree that they are inflated relative to other professions, but that just means for them the earnings gap is even greater. (https://www.commondreams.org/views/2020/01/21/if-worker-pay-...)

https://insights.dice.com/2019/07/10/how-much-tech-companies...

[davidf560]

Software developers simply do not get offered pay anything close to SV wages pretty much anywhere else in the US (maybe NYC? not sure on that one) - as far as I can tell. It's not really in dispute that SV software wages are significantly higher than elsewhere in the country, is it?

Now, we all know there's many reasons for that, including competition and housing costs. My point is that salaries are so much lower almost anywhere else that FAANG could offer half of what they do in SV and get the best of the best in an area because it would still be a huge premium over local rates. The question becomes: if Facebook could hypothetically switch all its employees to other parts of the US and pay them top dollar relative to the area, would they still be earning $600K profit per employee while spending considerably less on salaries? Prior to C19, FB needed to pay those rates to be able to attract the best to the high COL area in SV because they felt a strong need to have their employees co-located. If FB has proven to themselves that they can have their employees WFH permanently without any significant productivity loss, then naturally they will no longer care about having to attract people to the Bay (and by extension they wouldn't need to offer those kinds of salaries anymore).

But maybe I'm all wrong on this. Who knows.

[ghaff]

My understanding is that Google, say, does not offer half its Mountain View salary in Cambridge though I'm sure there's a difference.

A couple of things are being conflated.

SV housing costs are astronomical so some companies pay inflated salaries to at least somewhat compensate.

Certain large tech companies are willing to outbid essentially everyone else to get the people that (they think) are the best.

[ghaff]

Proximity to a major city still has advantages like access to cultural events, good healthcare, etc. even if you don't need to go into the city for work. And, indeed, historically tech companies were in the suburbs rather than the city itself. Boston basically didn't have any major tech employers within the city limits for a period even though there were many in the suburbs. So even people who may not want to actually live in a major city might still want to be within an hour or two of one.

I'd argue it sort of has played out. A handful of companies are willing to pay almost anything for the people they want, especially if they're located in SV. Pretty much everyone else has shrugged their shoulders and moved on. And it works because 1.) Hiring is a very inexact process and 2.) Not everyone want to work for one of the big tech companies for various reasons.

[908B64B197]

> Perhaps the real message here is that SV companies are realizing this is a perfect way to get out of paying $300-500K salaries for jobs that are more like $150K anywhere else in the US. It's kind of like the outsourcing craze from 15 years ago, except instead of getting 3-5 developers for the price of 1 by going to Europe or Asia, SV companies can get 3-5 developers for the price of 1 that are still US-based and only a couple of timezones away.

Is it really possible to get the same talent and skills?

[qes]

> Maybe this is overly simplistic... eventually the COL in SV will start to equalize with other places in the country like Chicago, won't it?

Chicago with an actual winter will likely never have the demand that California with it's year-round outdoor weather will have.

If costs were completely identical, would you rather live in Illinois or the Bay? How many other people you know would say the Bay?

[davidf560]

Believe it or not, I have no interest in living in the bay area - even if the costs were the same. I personally would like somewhere that didn't get quite so cold in the winter but still has 4 seasons.

I can honestly tell you that out of all the people I know, I can't think of a single one who would move to the bay area even if the costs were the same. Weather isn't everything.

[ghaff]

The Bay area is nice and I certainly understand the attraction when I visit. And I probably wouldn't want to live in Chicago; winters are especially brutal in the upper Midwest, there aren't "real" mountains, and I have no connection to the area. But I have no problems with winter generally and I doubt I would move to the Bay Area even if you took money off the table. Silicon Valley is meh and SF is nice to visit but has a lot of problems. Santa Cruz mountains maybe--if one ignores the wildfire problem.