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It would be interesting to calculate: - cost of living in the SFBA - cost of living somewhere other than SFBA but generally "equivalent" in the sense that liv

It would be interesting to calculate: - cost of living in the SFBA - cost of living somewhere other than SFBA but generally "equivalent" in the sense that living there wouldn't be seen as a negative - a average-ish amount of VC funds that must be invested in a company before capital is returned. - average amount of capital raise that goes to salary - what amount of salary is due to cost of living. It is getting a little bit convoluted, but that would allow you to approximate how much VC money is going to SFBA landlords due to the chokehold on housing supply. We're seeing a shade of this in the Amazon HQ2 process, but if you have actual physical mobility as an organization over different real estate markets and political jurisdictions it will shift the balance of power in terms of rents and taxation. I don't think it applies to small companies for various reasons, but the motive is there.

mattnewton 8y ago
As a note, make sure cost of living is determined in real terms, not percentages. Oftentimes places with a 80% cost of living will also pay 80% the other wage, which is a bad deal for an engineer because cost of living is not the total of all expenses- so savings and discretionary income actually goes down quite a bit.
- PowerfulWizard 8y ago
  Yeah, my thinking is if you just eliminate the component of salary that is purely dependent on cost of living, and not the part that is due to the extremely high demand for tech skills generally at the globally competitive level -- because that is all that you can eliminate by moving. Both of these factors push salaries up but you only eliminate one of them by moving.
  - mattnewton 8y ago
    There is also the fact that moving costs time and energy, and an engineer in the Bay Area will have a lot more options for employment if they stay in the Bay Area- they can walk between interviews for large multinational tech companies in a lot of cases. Moving from a hub like that has the implicit cost that you may have to move back at some point to find work, or accept the lesser options and negotiating position.
- jmspring 8y ago
  This. I split time between the Bay and up in north eastern Ca. Reality is, aside from housing, day to day costs are really no different - gas, food, utilities. I’m fortunate to have that flexibility, but percentages mask a number of things. I was talking to someone recently - with all the “tech” going into the Reno area, housing is getting more and more expensive. The average salary is still in the mid 30k range, however.
  - s0rce 8y ago
    California is expensive overall. However, other places are cheaper. I lived in Central/Eastern WA (Pasco) for a postdoc before moving to the bay and it was astronomically cheaper across the board even if you ignore housing (1800sqft house on 1/2 acre was $280k in 2014). Biggest non-housing difference was no state income tax, so save 7-10%, then pretty much all car/gas/insurance were about half. Food was a bit cheaper but not enough to make a big difference. We didn't go out much since restaurants weren't good but thats not really a far comparison. Where do you live in NE California? I love it up there (and SE Oregon)
branchless 8y ago
Which is why we need to tax land, not labour.

mattnewton 8y ago

As a note, make sure cost of living is determined in real terms, not percentages. Oftentimes places with a 80% cost of living will also pay 80% the other wage, which is a bad deal for an engineer because cost of living is not the total of all expenses- so savings and discretionary income actually goes down quite a bit.

PowerfulWizard 8y ago
Yeah, my thinking is if you just eliminate the component of salary that is purely dependent on cost of living, and not the part that is due to the extremely high demand for tech skills generally at the globally competitive level -- because that is all that you can eliminate by moving. Both of these factors push salaries up but you only eliminate one of them by moving.
- mattnewton 8y ago
  There is also the fact that moving costs time and energy, and an engineer in the Bay Area will have a lot more options for employment if they stay in the Bay Area- they can walk between interviews for large multinational tech companies in a lot of cases. Moving from a hub like that has the implicit cost that you may have to move back at some point to find work, or accept the lesser options and negotiating position.
jmspring 8y ago
This. I split time between the Bay and up in north eastern Ca. Reality is, aside from housing, day to day costs are really no different - gas, food, utilities. I’m fortunate to have that flexibility, but percentages mask a number of things. I was talking to someone recently - with all the “tech” going into the Reno area, housing is getting more and more expensive. The average salary is still in the mid 30k range, however.
- s0rce 8y ago
  California is expensive overall. However, other places are cheaper. I lived in Central/Eastern WA (Pasco) for a postdoc before moving to the bay and it was astronomically cheaper across the board even if you ignore housing (1800sqft house on 1/2 acre was $280k in 2014). Biggest non-housing difference was no state income tax, so save 7-10%, then pretty much all car/gas/insurance were about half. Food was a bit cheaper but not enough to make a big difference. We didn't go out much since restaurants weren't good but thats not really a far comparison. Where do you live in NE California? I love it up there (and SE Oregon)

branchless 8y ago

Which is why we need to tax land, not labour.