4 ms·

I think NYC (or SF or any high cost of living area) is a crazy place to put HQ2. In terms of subsidies, while it's easy to dunk on Amazon, and no business shoul

by rsj_hn 8y ago

I think NYC (or SF or any high cost of living area) is a crazy place to put HQ2. In terms of subsidies, while it's easy to dunk on Amazon, and no business should be getting subsidies IMO, there is a real issue here: Cost of Living in NY is higher and Amazon will have to pay higher wages if it puts jobs there rather than a place like Nashville. That's higher wages for the same job. Pretty much every company has a cost of living multiplier and pays different wages for the same position based on where you live. So given that Amazon has a choice to locate in the low wage or high wage area, it seems reasonable for the high wage area to offer to offset some of those extra costs. Otherwise why would AMZN even consider a high cost of living area like NYC? Now to me it's clear that the market signal is that they should open the new office in a lower cost of living area, which is what's going to happen now. A small victory for reason. This means more Amazon workers will be able to afford to buy a house and Amazon will be able to pay them less. Good news.

frontloadpro 8y ago
Less pay sounds good until you see the talent that comes with less pay. Junior devs and low performing seniors. Amazon claimed my city didn't have enough talent. What they meant is that 6 figures is too much to pay per programmer.
- deleted 8y ago
  [deleted]
- TulliusCicero 8y ago
  ...Amazon pays substantially more than 100k per programmer in the US.
TulliusCicero 8y ago
There's a reason you get superstar hubs, instead of companies and employees equalizing to somewhere else as soon as one metro gets a bit more expensive. Network/ecosystem effects are a real thing. Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC. Just saying, "well I guess Google is just being irrational for no reason" would be simplistic, childish thinking. Google doesn't choose sites or increase headcount on a whim. They're going to do it because there are real advantages to the major tech hubs. Educated guess, as someone who works at Google now and used to work at Amazon: it's easier to attract people to major tech hubs, because they offer more career stability in the form of having lots of other tech companies around. Being in Kansas City making a Google salary might sound great, until you realize that if you lost that job for some reason, there's nothing around in the same tier. Also, the kind of person who wants to live in a cheaper city, with a big house for their family, is also the kind of person who's going to be reluctant to move from wherever they currently live anyway. That demographic is going to be hard to convince.
- jshaqaw 8y ago
  There is another aspect of this which some younger people miss. A hub city means a dual professional couple can both find long term career paths in the same place. That’s much harder to do in a non-hub city. Top talent tends to marry top talent as per assortive mating.
  - fierro 8y ago
    endless list of reasons hub cities are good for business; people want to live and work there. especially young people as you said, couple's can more likely both find jobs, even if they work in vastly different sectors talent pool is larger many other businesses (potential customers) are there
- wnevets 8y ago
  > Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC. Location, Location, Location. Yes it's cheaper to live and run a business in Kansas but then you're in Kansas.
  - rsj_hn 8y ago
    I don't want to tell you what the right trade offs are between, say, living in Phoenix or Dallas or Charleston and living in NY or SF. But at some point people want to start families and buy a house and that starts to take precedence over being in a cool area. The only issue is jobs -- can they work remote, can they find a local employer, can they work for themselves? So there is a huge demand for higher paying jobs in lower cost areas compared to the demand for higher paying jobs in higher cost areas. You personally may think it unbearable to live in Scottsdale, AZ or Minneapolis, MN, but most people find it pleasant enough and will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY. Another data point is the taxes. This might be also interesting (pdf warning): https://www.edelman.com/sites/g/files/aatuss191/files/2019-02/2019_Edelman_Trust_Barometer_Special_Report_California.pdf?utm_source=website&utm_medium=special_report_california&utm_campaign=downloads https://www.edelman.com/sites/g/files/aatuss191/files/2019-0...

by rsj_hn 8y ago

frontloadpro 8y ago

Less pay sounds good until you see the talent that comes with less pay. Junior devs and low performing seniors. Amazon claimed my city didn't have enough talent. What they meant is that 6 figures is too much to pay per programmer.

deleted 8y ago
[deleted]
TulliusCicero 8y ago
...Amazon pays substantially more than 100k per programmer in the US.

TulliusCicero 8y ago

There's a reason you get superstar hubs, instead of companies and employees equalizing to somewhere else as soon as one metro gets a bit more expensive. Network/ecosystem effects are a real thing. Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC. Just saying, "well I guess Google is just being irrational for no reason" would be simplistic, childish thinking. Google doesn't choose sites or increase headcount on a whim. They're going to do it because there are real advantages to the major tech hubs. Educated guess, as someone who works at Google now and used to work at Amazon: it's easier to attract people to major tech hubs, because they offer more career stability in the form of having lots of other tech companies around. Being in Kansas City making a Google salary might sound great, until you realize that if you lost that job for some reason, there's nothing around in the same tier. Also, the kind of person who wants to live in a cheaper city, with a big house for their family, is also the kind of person who's going to be reluctant to move from wherever they currently live anyway. That demographic is going to be hard to convince.

jshaqaw 8y ago
There is another aspect of this which some younger people miss. A hub city means a dual professional couple can both find long term career paths in the same place. That’s much harder to do in a non-hub city. Top talent tends to marry top talent as per assortive mating.
- fierro 8y ago
  endless list of reasons hub cities are good for business; people want to live and work there. especially young people as you said, couple's can more likely both find jobs, even if they work in vastly different sectors talent pool is larger many other businesses (potential customers) are there
wnevets 8y ago
> Google already has some dev offices in cheaper areas, like Pittsburgh, where office space is cheaper and the salaries they pay slightly lower. And yet, they still choose to double their headcount in NYC. Location, Location, Location. Yes it's cheaper to live and run a business in Kansas but then you're in Kansas.
- rsj_hn 8y ago
  I don't want to tell you what the right trade offs are between, say, living in Phoenix or Dallas or Charleston and living in NY or SF. But at some point people want to start families and buy a house and that starts to take precedence over being in a cool area. The only issue is jobs -- can they work remote, can they find a local employer, can they work for themselves? So there is a huge demand for higher paying jobs in lower cost areas compared to the demand for higher paying jobs in higher cost areas. You personally may think it unbearable to live in Scottsdale, AZ or Minneapolis, MN, but most people find it pleasant enough and will pull the trigger as soon as they can find a job that pays even 2/3 of what they are earning in SF or NY. Another data point is the taxes. This might be also interesting (pdf warning): https://www.edelman.com/sites/g/files/aatuss191/files/2019-02/2019_Edelman_Trust_Barometer_Special_Report_California.pdf?utm_source=website&utm_medium=special_report_california&utm_campaign=downloads https://www.edelman.com/sites/g/files/aatuss191/files/2019-0...