4 ms·

If money is the issue, couldn't they convince them with more money?

by kgc 10y ago

bichiliad 10y ago
I know your comment is probably tongue-in-cheek, but that answer sounds like a band-aid at best. More seriously, people who aren't used to spending $15 for a quick lunch and whatever a month on rent aren't going to jump at that opportunity. I moved to New York from Pittsburgh, and paying 3x for rent really took a while to get used to, despite an increase in income that afforded me rent in New York.
- ChuckMcM 10y ago
  I don't know if it is a band-aid, rather it is part of the system. Specifically you're a company and you're trying to hire people to fill roles. If they are are required to be at the company you have to pay them enough that they can live near you. You set up a series of constraints on hiring: 1) Compensate[0] enough so that someone from outside can enter the local economy effectively. 2) Compensate enough to convince someone who is already in the local economy to change from where they work to working for you. 3) Compensate enough that someone working for you won't go work somewhere else. Within that system to have to operate a business model where the value you capture in the market has to cover not only your operating costs (which include compensation for the employees creating that value) but allows for you to fund maintenance, depreciation, and some R&D efforts for new product development. If you can't find a solution set that works you have to improve the business model (generally add revenue or cut costs). Not really rocket science of course. I keep watching to see if some large presence in SF ends up moving to the east bay or even Reno as a way of changing the cost parameters. If you look at job changing as brownian motion you can watch an environment parameters start to change which results in people (the particles in this case) start changing where they are likely to be. Personally I would love some quantitative data collection that helped map out the weights of the various factors. It would help predict the next 10 years. [0] Compensation is also a complex thing, more than just dollars per week/month/year there are things like free food, bus rides, and other services in addition to environmental plusses and minuses and work demands.
  - econner 10y ago
    I think the other complicating piece of compensation is the potential for equity to be worth something someday. It seems to me people in SF are here to take a shot on the startup lottery much more so than other places. It's also a city where you can easily play a few lottery tickets over a few years, which is not the same elsewhere.
    - ChuckMcM 10y ago
      Absolutely. Although in my experience it is a better deal in an already public company than a startup. Even when the stock is going down if you have an employee stock purchase plan where you can set aside money that will buy stock at fixed times for a percentage discount it can be huge win.
kc10 10y ago
Companies usually can't afford cash, so they compensate in stock. Vesting stock is usually taxed at ~46% and short-term taxes on top of it if you sell. So paycheck wise there won't be much difference.
- whack 10y ago
  > Vesting stock is usually taxed at ~46% and short-term taxes on top of it if you sell. I'm pretty sure that vested stock for public companies are taxed just like bonuses and wage-raises. I think the real reason why companies don't just "pay more" is because... well... they don't want to pay more. They either don't have the money, or they prefer to keep the money/stock for themselves.

If money is the issue, couldn't they convince them with more money?

by kgc 10y ago

If money is the issue, couldn't they convince them with more money?

I know your comment is probably tongue-in-cheek, but that answer sounds like a band-aid at best. More seriously, people who aren't used to spending $15 for a quick lunch and whatever a month on rent aren't going to jump at that opportunity. I moved to New York from Pittsburgh, and paying 3x for rent really took a while to get used to, despite an increase in income that afforded me rent in New York.

ChuckMcM 10y ago
I don't know if it is a band-aid, rather it is part of the system. Specifically you're a company and you're trying to hire people to fill roles. If they are are required to be at the company you have to pay them enough that they can live near you. You set up a series of constraints on hiring: 1) Compensate[0] enough so that someone from outside can enter the local economy effectively. 2) Compensate enough to convince someone who is already in the local economy to change from where they work to working for you. 3) Compensate enough that someone working for you won't go work somewhere else. Within that system to have to operate a business model where the value you capture in the market has to cover not only your operating costs (which include compensation for the employees creating that value) but allows for you to fund maintenance, depreciation, and some R&D efforts for new product development. If you can't find a solution set that works you have to improve the business model (generally add revenue or cut costs). Not really rocket science of course. I keep watching to see if some large presence in SF ends up moving to the east bay or even Reno as a way of changing the cost parameters. If you look at job changing as brownian motion you can watch an environment parameters start to change which results in people (the particles in this case) start changing where they are likely to be. Personally I would love some quantitative data collection that helped map out the weights of the various factors. It would help predict the next 10 years. [0] Compensation is also a complex thing, more than just dollars per week/month/year there are things like free food, bus rides, and other services in addition to environmental plusses and minuses and work demands.
- econner 10y ago
  I think the other complicating piece of compensation is the potential for equity to be worth something someday. It seems to me people in SF are here to take a shot on the startup lottery much more so than other places. It's also a city where you can easily play a few lottery tickets over a few years, which is not the same elsewhere.
  - ChuckMcM 10y ago
    Absolutely. Although in my experience it is a better deal in an already public company than a startup. Even when the stock is going down if you have an employee stock purchase plan where you can set aside money that will buy stock at fixed times for a percentage discount it can be huge win.

kc10 10y ago

Companies usually can't afford cash, so they compensate in stock. Vesting stock is usually taxed at ~46% and short-term taxes on top of it if you sell. So paycheck wise there won't be much difference.

whack 10y ago
> Vesting stock is usually taxed at ~46% and short-term taxes on top of it if you sell. I'm pretty sure that vested stock for public companies are taxed just like bonuses and wage-raises. I think the real reason why companies don't just "pay more" is because... well... they don't want to pay more. They either don't have the money, or they prefer to keep the money/stock for themselves.