[jld]

In a world where employees need to show up to 6X Co HQ everyday to work, the cost of living and the cost of hiring is directly linked (6x). But in a world where people can work anywhere, salaries will be disconnected from housing costs and we may see a lot of 6x companies happily slide lower. It will come down to how many employees meet the 6X Co's hiring bar and how good 6X Co is at turning new hires into productive employees. If there are enough available people above their current headcount, the floor will be closer to 1x. How close to 1x (2x? 4x? 5.5x?) is hard to know. I don't think it's simple to know where the market will fall after a remote work revolution.

[kshacker]

Great points and I will add:

It is easy for a thousand engineers to train in Bay Area and move elsewhere.

But could another locale train a thousand engineers to be ready to employed in the Bay Area companies?

In many cases, the value (initial value) comes from assimilating in the culture and while a lot of bigCos could still make people work in Bay Area before sending them home, the challenge is for these locations to evolve to be capable themselves.

[wcarss]

This forwards an over-inflated notion of the cultural and knowledge value that working at a Bay Area company imparts.

The Bay Area does not have a monopoly on good culture or experts: at times it may even notably lack them. There are many experts there and much good culture to learn from, but there are also many idiots and charlatans, and it is just as likely you'll find one of them first. How does a beginner tell the difference?

There is no locational bound on where people can learn to write great software, on where they can write great software, on where they can teach others to write great software, or on where a strong culture can be grown and shared, i.e. one of good ethics, responsibility, fun, art, innovation, trust, etc.

The Bay Area is not magical; it is just a place where a lot of money and a useful attitude toward spending it (on risky technology ventures) got cyclically concentrated over time.

[JoeAltmaier]

I believe most Engineers in the Bay Area did train somewhere else. California has 1/4 immigrants from other countries, and some similar amount moved there from other states.

[wcarss]

> "In a world where employees need to show up to 6X Co HQ everyday to work, the cost of living and the cost of hiring is directly linked (6x)."

They are not directly linked, and it is a harmful falsehood to perpetuate (sorry to single your specific comment out here -- I know lots of people are saying it.)

Would they pay you more if you moved to a more expensive area of the city, or less if you chose a bit cheaper? Would they pay you noticeably more in a year of higher than average inflation? Would they change your wage depending upon your marital status, which impacts expenses dramatically? At any point in setting your offer number, did they do calculations of your reasonable expenses, or ever take into account what type of lifestyle you lead? No.

If you are a software developer, you likely make enough to pay an average person's bills in your area, plus some luxuries, and then a bit more beyond. Likely enough to put away some savings over time. Was $YourCo just ... very generous in letting you have that amount of savings, compared to other industries, which pay less?

No. None of these are the case, because cost of living is not relevant to your salary, except to the small degree in which it factors into what the market (i.e. we) expects and will accept. That is where "region" has traditionally played a role, because low mobility between regions has historically made them into homogenous, isolated markets, which is where this falsehood can creep in.

So what really sets that number?

Industry salary reports, people's beliefs in 'the market trends', gossip about what other companies are offering, the acceptance rate they've had on offers in the recent past, your stated salary expectations, your experience level, the degree of specialization your role has, the importance of that role to them, their overall budget for hires, whether you negotiated or not, and whether or not you have competing offers you can play against them. All this boils down to "what they think you will accept, and how badly they want you." -- not your costs.

What happens when American employers starting hiring more and more in Europe/Africa/Asia? I'm not sure. I think fluent English communication skills, timezone affinity, cultural connection, and ease of travel to 'say hi' all form bits of moat, but those will certainly matter less and less with time.

In the near term, as SF+NYC start to allow remote work 'across North America', I think there are just way more jobs and companies looking than there are liquid engineers ready to move. Salaries might drop while we transition, but I really believe they'll go broadly as high as (or higher than) they were in those markets for a time, and this Spotify move is exactly why: the big players will now be competing for the best people everywhere, and the average carrying cost per employee, with no office requirements, is way down.

I definitely agree it's not simple to know where the market will fall in the long run. If European/African/Asian companies start correspondingly hiring here, that'll help North American engineers overall, but I'm not sure if we'll all end up at 1x, 3x, .5x, or what. It's easy to forget that there is room for an awful lot of software jobs in the world, especially, again if companies no longer need to pay for office space proportional to headcount. Some of these companies have a lot of money and were primarily constrained in the past by offices+office-inertia.

Regardless, 'cost of living' is not the root cause driving wages that people keep claiming it is, and when employees join in that lie, it hurts us.

It's all just what the markets of employers and employees are willing to bear, and what we should really be estimating as those isolated markets merge over the next decade is more like #qualified engineers / # potential software jobs, world-wide.