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I don't disagree with your assessment of the issue, but I question the federal government as the solution. This has long felt to me like the free market not wor

I don't disagree with your assessment of the issue, but I question the federal government as the solution. This has long felt to me like the free market not working, but I can't quite figure out why. For decades now, I've not understood why companies don't relocate to places like Des Moines or Kansas City. Labor was cheap, land was cheap, governments are willing to give you credits to move your business there, etc. The midwest is crawling with small colleges churning out educated people. After spending a decade in Seattle I moved inland for cheaper real estate (and this was back in 2010 because I thought Seattle housing had already gone insane back then). I've been a remote worker / road warrior type since 2005, and the opportunities for remote work or to work from where you want have only gotten easier. Why would I hire the $250K+ developer in the Bay Area, have to cover office costs, etc there, when I could encourage them to live in Boise or some other lower-cost area? So, to my thinking - employers need to get more creative and drop the industrial era mindset of control. Certainly there are jobs that require people and equipment being in one physical location. Certainly the most profitable large companies - the Googles, Microsofts, Apples, etc of the world might choose to establish centralized corporate campuses. For everybody else though, the economics make far more sense in other parts of the country.

fredophile 7y ago
Have you ever tried to get someone to move to Boise? Did you succeed? I work for a tech company in North Carolina. Cost of living is very reasonable and there are plenty of tech companies here but in my experience getting someone to move here for work is hard. It's not just the employers you need to convince.
- hiram112 7y ago
  That's probably because North Carolina companies (especially in Charlotte) pay horribly, especially now that homes are becoming more expensive there, like every other large city. Furthermore, Charlotte is heavily banking and finance, and thus lean heavily on H1B visas for most of their enterprise jobs. I've had recruiters contact me for jobs in the area and the salaries were a joke. Honestly, I don't know if they were for real or just using it as 'proof' that they couldn't hire any Americans so they could forward off a few hundred more H1B petitions to USCIS...
  - mywittyname 7y ago
    OP is probably talking about Research Triangle Park, which does have a lot of interesting technology jobs.
    - blt 7y ago
      ... that pay a lot less than their big-city counterparts.
      - mcguire 7y ago
        Median hourly wage, Computer and Mathematical Occupations, San Francisco: $56.18 ($112,360 ann.) Median hourly wage, Computer and Mathematical Occupations, Durham-Chapel Hill: $42.77 ($85,540 ann.) https://www.bls.gov/oes/current/oes_41860.htm#15-0000 https://www.bls.gov/oes/current/oes_41860.htm#15-0000 https://www.bls.gov/oes/current/oes_20500.htm#15-0000 https://www.bls.gov/oes/current/oes_20500.htm#15-0000
        blt 7y ago
        That difference is smaller than I thought. It's probably a no-brainer if you want to buy a house and raise a family. But from the perspective of a young single person, an extra $30k/year will get you from $1k/month rent to a $3k/month rent. Of course, rent isn't the only thing more expensive in the Bay area. But once you factor in better weather, more things to do, less conservatism - I find it unsurprising that many young people would not want to switch.
        mcguire 7y ago
        I'll give you better weather. More things to do? I'm not sure. Less conservative? Well, my reference point is Austin, TX, in which case I'd disagree. Fewer hot (HOT! HOT! HOT!) tech jobs? Probably.
        fredophile 7y ago
        $1k/month to $3k/month is $24k per year in post tax dollars. You're going to need to make more than $30k more a year to get this. I just ran the numbers for a $100k salary in NC and $130k in California. The person in NC will pay $17203.92 in federal taxes and $5250 in state taxes for a total of $22453.92. The person in California pays $24403.92 and $9094.69 for a total of $33498.61. This brings their post tax income to $96501.39 for California and $77546.08 for NC. The person in California only makes about $1.5k extra a month. There are plenty of non-monetary reasons why someone might choose to live in one state or the other but you do need a lot more money in California to cover the cost of basics like housing. Not properly accounting for that could give someone quite a shock if they relocate there.
- poulsbohemian 7y ago
  My argument would be - don't convince people to move there, hire the people already there. Identify the pioneers who do want to move and incentivize them to do so as well. Here's an example from a recent client in Seattle. Two year old company, approx. ten employees, hiring at least one person a month. Couple hundred square feet of class-a office space, likely $42/square foot and increasing. Turned over nearly all of their staff on a yearly basis because they couldn't compete with comp at Amazon, Microsoft, etc. Had a number of entry-level type clerical jobs that they were outsourcing to India but doing so unsuccessfully (IE: the resources they had weren't particularly cheap but also didn't really have the necessary skills). Same entry-level jobs couldn't pay quite enough in Seattle to incentivize someone to either stick around or be willing to commute from the suburbs (unless they were really desperate). My point to them time and time again was - they were a small company, undercapitalized like many small businesses, and they were spending stupid money every month on people and office space that made no sense given their business. They could have moved to Spokane, Yakima, the Tri-Cities or lots of other cheaper places even in the same state and been able to find the talent they need and cut their office costs in half. Given the nature of their business, sure, maybe they needed to keep a couple people (mostly sales / execs / bizdev) in Seattle - but even those could have worked from home. Last I checked, the largest concentration of PhDs in the country is in... the Tri-Cities, Washington. The state with the greatest number of college graduates per capita is... Iowa. These are not exactly places on anyone's radar. Bend, Oregon has a growing number of people who "commute" to Silicon Valley. I live in the middle of nowhere, but there are a growing number of people from Seattle willing to move here (and occasionally take the 45 minute commuter flight) in order to escape the cost and crowding of living over there. Boise is growing entirely by people fleeing from coastal cities. Someone in this thread posted Paul Graham's essay about startup hubs, which I recall reading and it gels exactly with my thinking as well - go to these micro hubs around the country and be part of growing them from within.
mywittyname 7y ago
> For decades now, I've not understood why companies don't relocate to places like Des Moines or Kansas City. I can tell you exactly why: these cities aren't places senior management want to live. I know this because I've worked for three companies over the years that have moved technology centers from cities on that list, to places like NYC & SF. The labor cost increase didn't seem to bother them, nor the price of real estate. What happened was the company hired a new CEO, the new CEO hates living in Smallville, USA, and creates an initiative to relocate the company back to where they want to be. Ostensibly, this move is part of plan to improve technical innovation. They all claimed that coastal workers were superior to those from the Mid-west. Whether because they are higher educated, have more exposure to cutting edge technology, or whatever ("[SF, NYC, Dallas, etc] is home to (famous university/tech company"). It's pretty obvious what the real reason is, as the new executives are the first people out the door. The only way to keep these companies is to either force them, or make the region desirable to rich people.
- cgy1 7y ago
  See, e.g., Caterpillar moving their global HQ from Peoria to the Chicago area.
- poulsbohemian 7y ago
  I get it - it's the same reason Boeing management moved to Chicago away from Seattle (fools!). Ok fine, if the execs want to move, let them, but leave the workers in Smallville if that makes sense.
mcguire 7y ago
For California specifically, there are three factors: 1. Originally, the area was home to several very good universities. Today, these provide a ready source of workers with advanced job training. On the other hand, I'll bet they are a small minority of the workers in the area now. 2. That's where the money is. Much of the "capital"[1] comes from previously successful businesses and those people don't want to move (and don't have any problems with high rents). 3. Density promotes density. More workers there makes hiring new ones easier (and replacing old ones), and the availability of "attractive" jobs draws more workers. The area hasn't (and probably can't) adapt as fast as money and immigrants, hence the infrastructure issues. It's hard to fix that from the top down. Take Austin, which did it from the bottom up; a number of foresighted rich folks boosted UT's tech training, leading to it's success in recent decades, but it's now facing the same problems. Options: Hold your nose, go to CA and make your money and get the hell out. Wait for the next cyclic bust, buy property when the prices collapse. Organically start the process elsewhere, with the same results. Choose to go elsewhere and accept the salary reduction.
- poulsbohemian 7y ago
  I'm familiar with the "creation story" but I question whether that is all necessary for other areas to thrive. Do I think that East BFE, Nowheresville is going to become the next Silicon Valley? No, probably not - but I don't know that it needs to. Twenty years from now, Google and Apple will probably still be at their respective California locations. But JohnDoe Co could be the biggest employer in <middle American city of 200,000> and do a lot of economic good there while reaping the benefits. Most of us don't need PE / VC like we think we do and there are plenty of good-enough universities around the country churning out new grads and attracting talented-enough researchers. This idea that we can only hire in coastal cities and from top-5 universities is all wrapped up in the same problem, and it doesn't make sense for the majority of businesses.
  - mcguire 7y ago
    "Most of us don't need PE / VC like we think we do..." Don't look at me, I'm not the one you need to convince. That'd be the hordes of newly-graduated who think they have to move to <dense coastal city> to get a good job (although how much of that money will stick to them, I can't say).

fredophile 7y ago

Have you ever tried to get someone to move to Boise? Did you succeed? I work for a tech company in North Carolina. Cost of living is very reasonable and there are plenty of tech companies here but in my experience getting someone to move here for work is hard. It's not just the employers you need to convince.

hiram112 7y ago
That's probably because North Carolina companies (especially in Charlotte) pay horribly, especially now that homes are becoming more expensive there, like every other large city. Furthermore, Charlotte is heavily banking and finance, and thus lean heavily on H1B visas for most of their enterprise jobs. I've had recruiters contact me for jobs in the area and the salaries were a joke. Honestly, I don't know if they were for real or just using it as 'proof' that they couldn't hire any Americans so they could forward off a few hundred more H1B petitions to USCIS...
- mywittyname 7y ago
  OP is probably talking about Research Triangle Park, which does have a lot of interesting technology jobs.
  - blt 7y ago
    ... that pay a lot less than their big-city counterparts.
    - mcguire 7y ago
      Median hourly wage, Computer and Mathematical Occupations, San Francisco: $56.18 ($112,360 ann.) Median hourly wage, Computer and Mathematical Occupations, Durham-Chapel Hill: $42.77 ($85,540 ann.) https://www.bls.gov/oes/current/oes_41860.htm#15-0000 https://www.bls.gov/oes/current/oes_41860.htm#15-0000 https://www.bls.gov/oes/current/oes_20500.htm#15-0000 https://www.bls.gov/oes/current/oes_20500.htm#15-0000
      - blt 7y ago
        That difference is smaller than I thought. It's probably a no-brainer if you want to buy a house and raise a family. But from the perspective of a young single person, an extra $30k/year will get you from $1k/month rent to a $3k/month rent. Of course, rent isn't the only thing more expensive in the Bay area. But once you factor in better weather, more things to do, less conservatism - I find it unsurprising that many young people would not want to switch.
        mcguire 7y ago
        I'll give you better weather. More things to do? I'm not sure. Less conservative? Well, my reference point is Austin, TX, in which case I'd disagree. Fewer hot (HOT! HOT! HOT!) tech jobs? Probably.
        fredophile 7y ago
        $1k/month to $3k/month is $24k per year in post tax dollars. You're going to need to make more than $30k more a year to get this. I just ran the numbers for a $100k salary in NC and $130k in California. The person in NC will pay $17203.92 in federal taxes and $5250 in state taxes for a total of $22453.92. The person in California pays $24403.92 and $9094.69 for a total of $33498.61. This brings their post tax income to $96501.39 for California and $77546.08 for NC. The person in California only makes about $1.5k extra a month. There are plenty of non-monetary reasons why someone might choose to live in one state or the other but you do need a lot more money in California to cover the cost of basics like housing. Not properly accounting for that could give someone quite a shock if they relocate there.
poulsbohemian 7y ago
My argument would be - don't convince people to move there, hire the people already there. Identify the pioneers who do want to move and incentivize them to do so as well. Here's an example from a recent client in Seattle. Two year old company, approx. ten employees, hiring at least one person a month. Couple hundred square feet of class-a office space, likely $42/square foot and increasing. Turned over nearly all of their staff on a yearly basis because they couldn't compete with comp at Amazon, Microsoft, etc. Had a number of entry-level type clerical jobs that they were outsourcing to India but doing so unsuccessfully (IE: the resources they had weren't particularly cheap but also didn't really have the necessary skills). Same entry-level jobs couldn't pay quite enough in Seattle to incentivize someone to either stick around or be willing to commute from the suburbs (unless they were really desperate). My point to them time and time again was - they were a small company, undercapitalized like many small businesses, and they were spending stupid money every month on people and office space that made no sense given their business. They could have moved to Spokane, Yakima, the Tri-Cities or lots of other cheaper places even in the same state and been able to find the talent they need and cut their office costs in half. Given the nature of their business, sure, maybe they needed to keep a couple people (mostly sales / execs / bizdev) in Seattle - but even those could have worked from home. Last I checked, the largest concentration of PhDs in the country is in... the Tri-Cities, Washington. The state with the greatest number of college graduates per capita is... Iowa. These are not exactly places on anyone's radar. Bend, Oregon has a growing number of people who "commute" to Silicon Valley. I live in the middle of nowhere, but there are a growing number of people from Seattle willing to move here (and occasionally take the 45 minute commuter flight) in order to escape the cost and crowding of living over there. Boise is growing entirely by people fleeing from coastal cities. Someone in this thread posted Paul Graham's essay about startup hubs, which I recall reading and it gels exactly with my thinking as well - go to these micro hubs around the country and be part of growing them from within.

mywittyname 7y ago

> For decades now, I've not understood why companies don't relocate to places like Des Moines or Kansas City. I can tell you exactly why: these cities aren't places senior management want to live. I know this because I've worked for three companies over the years that have moved technology centers from cities on that list, to places like NYC & SF. The labor cost increase didn't seem to bother them, nor the price of real estate. What happened was the company hired a new CEO, the new CEO hates living in Smallville, USA, and creates an initiative to relocate the company back to where they want to be. Ostensibly, this move is part of plan to improve technical innovation. They all claimed that coastal workers were superior to those from the Mid-west. Whether because they are higher educated, have more exposure to cutting edge technology, or whatever ("[SF, NYC, Dallas, etc] is home to (famous university/tech company"). It's pretty obvious what the real reason is, as the new executives are the first people out the door. The only way to keep these companies is to either force them, or make the region desirable to rich people.

cgy1 7y ago
See, e.g., Caterpillar moving their global HQ from Peoria to the Chicago area.
poulsbohemian 7y ago
I get it - it's the same reason Boeing management moved to Chicago away from Seattle (fools!). Ok fine, if the execs want to move, let them, but leave the workers in Smallville if that makes sense.

mcguire 7y ago

For California specifically, there are three factors: 1. Originally, the area was home to several very good universities. Today, these provide a ready source of workers with advanced job training. On the other hand, I'll bet they are a small minority of the workers in the area now. 2. That's where the money is. Much of the "capital"[1] comes from previously successful businesses and those people don't want to move (and don't have any problems with high rents). 3. Density promotes density. More workers there makes hiring new ones easier (and replacing old ones), and the availability of "attractive" jobs draws more workers. The area hasn't (and probably can't) adapt as fast as money and immigrants, hence the infrastructure issues. It's hard to fix that from the top down. Take Austin, which did it from the bottom up; a number of foresighted rich folks boosted UT's tech training, leading to it's success in recent decades, but it's now facing the same problems. Options: Hold your nose, go to CA and make your money and get the hell out. Wait for the next cyclic bust, buy property when the prices collapse. Organically start the process elsewhere, with the same results. Choose to go elsewhere and accept the salary reduction.

poulsbohemian 7y ago
I'm familiar with the "creation story" but I question whether that is all necessary for other areas to thrive. Do I think that East BFE, Nowheresville is going to become the next Silicon Valley? No, probably not - but I don't know that it needs to. Twenty years from now, Google and Apple will probably still be at their respective California locations. But JohnDoe Co could be the biggest employer in <middle American city of 200,000> and do a lot of economic good there while reaping the benefits. Most of us don't need PE / VC like we think we do and there are plenty of good-enough universities around the country churning out new grads and attracting talented-enough researchers. This idea that we can only hire in coastal cities and from top-5 universities is all wrapped up in the same problem, and it doesn't make sense for the majority of businesses.
- mcguire 7y ago
  "Most of us don't need PE / VC like we think we do..." Don't look at me, I'm not the one you need to convince. That'd be the hordes of newly-graduated who think they have to move to <dense coastal city> to get a good job (although how much of that money will stick to them, I can't say).