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No. They’re spending it all on housing. To be clear the flow is: tech companies make enormous revenue but require high skill workers. To make this work they pa

No. They’re spending it all on housing. To be clear the flow is: tech companies make enormous revenue but require high skill workers. To make this work they pay whatever it costs to get workers and no more - in this case that means just enough to offset the enormous cost of housing. Since the baby boomers practically banned all housing development in the bay once their little burns were built, this result in a little see-saw battle where landlords raise the rent until tech companies are forced to raise wages, back and forth. Employees are left with an equation that looks basically like: enormous salary - obscene rent = just a bit more cash flow than you’d earn in software anywhere else. Thus the flow of capital is from tech companies to landlords, in an arms race that will only end when the landlords have taken so much of the capital out of tech that the industry sputters and moves away.

rrcaptain 8y ago
Or until landlords are abolished like they should be.
orangecat 8y ago
Employees are left with an equation that looks basically like: enormous salary - obscene rent = just a bit more cash flow than you’d earn in software anywhere else. It's probably true that the cost of minimally acceptable housing drives entry level tech salaries, but they go way up from there. A senior SWE at Google with salary+bonus+stock of $300k/year has a whole lot of disposable income even after the ridiculous housing expenses.
- solidsnack9000 8y ago
  There are very few senior SWEs at Google, relative to tech employees as a whole.
- burlesona 8y ago
  First off, Google employees are the outliers even in SF. Second, there are many situational factors that make a huge difference as to whether 300k leaves “a whole lot of disposable income.” The simplest is families living on one income. In most of the country this is easily achievable if you can break six figures, but in SF housing is priced for two full area incomes, so if you want to make it work with one parent at home you either have a relatively small and ratty apartment (compared to housing stock elsewhere) or you spend $6000+ per month on housing which takes a dramatic bite out of that $300k you’re taking about.

rrcaptain 8y ago

Or until landlords are abolished like they should be.

orangecat 8y ago

Employees are left with an equation that looks basically like: enormous salary - obscene rent = just a bit more cash flow than you’d earn in software anywhere else. It's probably true that the cost of minimally acceptable housing drives entry level tech salaries, but they go way up from there. A senior SWE at Google with salary+bonus+stock of $300k/year has a whole lot of disposable income even after the ridiculous housing expenses.

solidsnack9000 8y ago
There are very few senior SWEs at Google, relative to tech employees as a whole.
burlesona 8y ago
First off, Google employees are the outliers even in SF. Second, there are many situational factors that make a huge difference as to whether 300k leaves “a whole lot of disposable income.” The simplest is families living on one income. In most of the country this is easily achievable if you can break six figures, but in SF housing is priced for two full area incomes, so if you want to make it work with one parent at home you either have a relatively small and ratty apartment (compared to housing stock elsewhere) or you spend $6000+ per month on housing which takes a dramatic bite out of that $300k you’re taking about.