8 ms·

I agree, mostly. The bottom is still decently high even in Midwest cities. But if you’re making $140,000 + RSU/Bonus/Etc., someone from somewhere else will do t

I agree, mostly. The bottom is still decently high even in Midwest cities. But if you’re making $140,000 + RSU/Bonus/Etc., someone from somewhere else will do that job remotely for $100,000 easy. But I would characterize this as a wealth distribution, and overall net positive for the country. People who don’t have the opportunities to work at the top companies in the Bay Area or NYC or Boston now have better access. And the wages flow to those different areas.

sandworm101 6y ago
>> wealth distribution At the moment that may be true but increasing the pool of potential labor rarely results in wealth distribution. I think companies will pay less. That money won't go to other hires as tech companies limit hiring for other reasons than money. The money will go to bottom lines, to stockholders: the opposite of wealth distribution.
- ericmay 6y ago
  A few thoughts: 1. Americans need to buy and hold equities. Period. When Google cuts costs or makes more money, I benefit as a shareholder (or you can hold total market indexes and the like). 2. Maybe the money will go to new hires, capabilities, expenditures, etc. ? 3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like. 4. Increase taxes on the wealthy, etc. One arguing point I'd like to make though is that if this doesn't result in wealth redistribution (companies will pay less and this is fine) should we all begin moving to a few cities?
  - arcturus17 6y ago
    How much equity would you need to hold to compensate for a 30-40% decrease in wages?
    - ericmay 6y ago
      Who is experiencing the decrease in wages? For many Americans the distribution of these jobs to other locations would result in an increase in wages. Not to mention, the top companies would still hire top talent in a competitive market.
      - devilduck 6y ago
        I don't know, maybe the millions of people who are currently out of work due to covid are experiencing a decrease in wages? Just a guess.
      - gabereiser 6y ago
        Exactly. This argument that cheaper workforce is out in the sticks, waiting for “remote work” is a lie corporate America has told to keep people in the office. The truth is, no matter where you are, talent knows what talent is worth. We price accordingly and in the end the market is stable at a certain price level. We’ve been seeing this over the last decade in major US cities competing for SF-level talent. Tech is one of the highest paid professions. Remote or otherwise. To say companies will just go hire someone cheaper assumes they can find someone cheaper. In the end I think the real winners are rural America (or Europe or where ever you live). Having a lifeblood of capital come back to small towns and the like will decentralize our cities, improve our quality of life, reinforce the need for infrastructure, and allow innovation to solve those problems. Exciting times.
        ericmay 6y ago
        Thanks, Gabe. And I don't think it's SV -> Rural America exclusively. Many of these jobs will filter back into medium to large sized metros across the country. Places like Columbus, Indianapolis, St Louis, Atlanta, Nashville, etc. . There are scores of talented developers in these areas that would be open to remote work, but not relocation to the major metro areas.
        throwaway201103 6y ago
        Not to mention eastern Europe, South America, Asia, etc.
  - throwaway45349 6y ago
    > Increase taxes on the wealthy, etc. Anyone working for a Silicon Valley company as an engineer is almost certainly considered "the wealthy" by most of America.
    - ericmay 6y ago
      Yep.
    - sandworm101 6y ago
      >> Anyone working for a Silicon Valley Depending on your definition of wealthy, "anyone working" full stop. A large number of americans do not work (too young/old etc). Others are sick. Many at the top of society don't earn much income (tax voodoo). And automation is coming. If we define "wealthy" as the top 25/15/10% of wage earners, how soon before that is basically just anyone with a fulltime job?
      - iso1631 6y ago
        Wealthy is about how much wealth you have, not your income. In 2020, $121,411 was the median household net worth in the United States. This is up from $97,225.55 in 2017. The average household net worth in 2020 was $746,821. It was $692,100 in 2017. The disparity between these two numbers is itself a major problem, but not the point. If you have a net work of $120k you aren't wealthy, even if you earnt that all in the last month. The way you get from having no wealth to having an average amount is by working harder and earning more. However the tax system is built to punish people who earn more money from work, and reward people who gain more wealth through things like capital gains -- you pay more tax if you increase your wealth by a dollar from working than from the side-effect of being already wealthy and seeing your assets gain value. You're also far more likely to have higher outgoings if you're working (higher cost to live near a high paying job, commuting costs etc) If you are on the median ohio wage on 37k a year, so $30,427.47 net, and spending 37k to live, your wealth doesn't increase. If you work an extra 1k, you take home $31,202.47 -- $775, 22.5% tax. If you make 1k in capital gains, you keep $971, 3% tax. Look at twice median wage of 74k a year. Take home 57,439.49. Extra $1k will give you 58,109.69, an extra $670 - 33% tax. Make 1k in capital gains and you pay 18% tax. Earn 10 times the median wage at $370k and you keep 239,713.20, 42% tax. Get 1k in capital gains and you keep $764, 24% tax. https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/ https://www.thebalance.com/breakdown-of-average-monthly-household-expenses-4687519 https://www.thebalance.com/breakdown-of-average-monthly-hous... https://goodcalculators.com/us-salary-tax-calculator/ohio/ https://goodcalculators.com/us-salary-tax-calculator/ohio/ https://smartasset.com/investing/capital-gains-tax-calculator https://smartasset.com/investing/capital-gains-tax-calculato...
  - bendbro 6y ago
    > 1. Americans need to buy and hold equities. Period. When Google cuts costs or makes more money, I benefit as a shareholder (or you can hold total market indexes and the like). Yes, but it is not good that your "compensation" will be coming from something that isn't tied to your job performance. Wages at least have some tenuous connection to how well you perform at work. > 2. Maybe the money will go to new hires, capabilities, expenditures, etc. ? Based on recent trends, this will not happen. > 3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like. Yes, definitely. > 4. Increase taxes on the wealthy, etc. Yes, or nationalize the banks.
    - ericd 6y ago
      Why is it bad that part of your compensation comes from things that aren't tied to your performance at work?
    - Proziam 6y ago
      > Yes, but it is not good that your "compensation" will be coming from something that isn't tied to your job performance. Wages at least have some tenuous connection to how well you perform at work. It also doesn't account for the fact that these equities can lose substantial value, or may be over-valued. > Yes, or nationalize the banks. Re-implement the Glass-Steagall Act, or similar. Nationalization leaves the levers of power in the hands of the wrong people. Keeping commercial and investment banking separate while implementing strong consumer protections was shown to work well in the past. Also, it has shown that the repeal massively reduced the amount of banks (killing competition) so it stands to reason that trend could be reversed and improve the consumer banking experience over time.
  - jelliclesfarm 6y ago
    > 4. Increase taxes on the wealthy, etc. This won’t work. When the tech exodus begins, it’s going to cause CA to buckle at its knees because the wealthy has been subsidizing more than 80% of the population. It is not sustainable or healthy at all to suckle at the teat of the wealthy. We should abolish all taxes and only retain taxes based on consumption. And a flat modest capital gains tax. With dedications gone, this might actually bring in more public money. Public spending will also decrease if we figure a way out of unfunded pension liabilities. This is huge. Don’t know how it can be resolved.
    - DeRock 6y ago
      > the wealthy has been subsidizing more than 80% of the population CA does not tax wealth, they tax (predominately) income, and I wouldn't be so quick to equate the 2. Prop 13, for example, can mean that wealthy land owners pay almost nothing in tax if they've owned their property for a long time.
      - rcpt 6y ago
        > Prop 13 https://www.taxfairnessproject.org/ https://www.taxfairnessproject.org/ generally the wealthier you are the bigger your tax cut.
- CountSessine 6y ago
  Maybe? But as things are, most of those generous employee salaries are parasitized by NIMBY landlords and property owners in SFBA who have selfishly engineered SF's horrendous housing supply shortage. If that value is going to be captured by anyone, I would much MUCH rather it be captured by Google shareholders, many of whom are employees and are at least partly responsible for the company's incredible success, than lazy and parasitic SFBA landlords who profit from their own NIMBYism and regulatory predation.
  - dpoochieni 6y ago
    Not maybe, it is supply and demand. IF the supply of remote labor does increase then the share of economic profit going to capital also increases. (i.e. Employers keep more of the profits as opposed to sharing)
    - Raidion 6y ago
      This is true both ways though. If you're getting paid 140k, but your rent is 5k a month, you're only capturing 80k of wages, and the landlords are capturing 60k in rent. If you're working remotely for 100k, and paying 1.7k a month in rent, you're capturing ~80k as well. That means more capital is going to the employers(who saves 40k) at the expense of the landlords (who lose out on that 40k). I honestly think I'd rather have the capital go to the employers because a) it improves my value in relation to them (I now can argue that I should get paid more, because I bring in 40k a year more value than I did in SV) AND I have a financial interest in the company doing well (with options/RSUs/bonuses/etc). The money going to the landlords starts to become very literally "rent seeking" where they will capture the capital without providing any productivity gains in return. You could argue that their value in "provide a location for people to live so they can collaborate more effectively" is decreasing with remote work, and they will have to charge less because the value they provide is decreasing.
      - bcheung 6y ago
        The bay area is one of the worse places to have rental properties in the country though in terms of ratio of rental income to mortgage costs. If it wasn't for appreciation most would sell instead of try to rent out homes. Landlords aren't making their money from the rents, they are making it from the appreciation.
- deleted 6y ago
  [deleted]
eikenberry 6y ago
The one thing people seem to keep forgetting about when talking about this race to the bottom is how hard it is to find good software authors. My company is fully remote and global and it is still really hard to find good people. I really don't see much of a change given the current unmet, and rising, demand.
- kbos87 6y ago
  Agree with this. If a purely cost driven race to the bottom is inevitable, it already would have happened. I think what’s going on right now increases the competition for roles that some people may have previously had a geographic advantage over others in obtaining, but I don’t think this means that advantage is gone, nor do I think it’s a zero sum game. There may be some downward wage pressure, but if cost was your only motivator as an employer, you were probably already hiring remote teams in low cost markets.
- heavyset_go 6y ago
  I hear this a lot from employers, but more often than not, they are not willing to offer competitive compensation for the level of talent they wish to attract.
  - gwright 6y ago
    That is just another way of saying that good talent is scarce.
- NonEUCitizen 6y ago
  How much does your company pay?
- aborsy 6y ago
  I think you greatly underestimate global talent for some reason.
  - eikenberry 6y ago
    I think you greatly underestimate the global demand.
shoguning 6y ago
> The bottom is still decently high even in Midwest cities Yes, and I also see the push for remote work also affecting the demand side of the software labor market as well as the supply. There will be even more push for good collaboration/communication work process software. It's still a fast growing market.
kodah 6y ago
Former Texan here! You will not get RSU's or bonuses as an engineer in Texas. You will get cash and insurance. If you doubt me, feel free to go on an interview and ask about those things! I can tell you there's a reason I left Texas and it's because cash doesn't do to your savings what RSU's and bonuses will.
- ericmay 6y ago
  Companies here in Ohio do both RSU and bonuses. Sometimes one or the other, sometimes a mix as part of total compensation.
- brandonscott 6y ago
  I'm an engineer in Austin. We definitely get bonuses and I have RSUs at my current company.
  - kodah 6y ago
    It's good to hear that's changed. When I was in Dallas that was certainly not the case.

sandworm101 6y ago

>> wealth distribution At the moment that may be true but increasing the pool of potential labor rarely results in wealth distribution. I think companies will pay less. That money won't go to other hires as tech companies limit hiring for other reasons than money. The money will go to bottom lines, to stockholders: the opposite of wealth distribution.

ericmay 6y ago
A few thoughts: 1. Americans need to buy and hold equities. Period. When Google cuts costs or makes more money, I benefit as a shareholder (or you can hold total market indexes and the like). 2. Maybe the money will go to new hires, capabilities, expenditures, etc. ? 3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like. 4. Increase taxes on the wealthy, etc. One arguing point I'd like to make though is that if this doesn't result in wealth redistribution (companies will pay less and this is fine) should we all begin moving to a few cities?
- arcturus17 6y ago
  How much equity would you need to hold to compensate for a 30-40% decrease in wages?
  - ericmay 6y ago
    Who is experiencing the decrease in wages? For many Americans the distribution of these jobs to other locations would result in an increase in wages. Not to mention, the top companies would still hire top talent in a competitive market.
    - devilduck 6y ago
      I don't know, maybe the millions of people who are currently out of work due to covid are experiencing a decrease in wages? Just a guess.
    - gabereiser 6y ago
      Exactly. This argument that cheaper workforce is out in the sticks, waiting for “remote work” is a lie corporate America has told to keep people in the office. The truth is, no matter where you are, talent knows what talent is worth. We price accordingly and in the end the market is stable at a certain price level. We’ve been seeing this over the last decade in major US cities competing for SF-level talent. Tech is one of the highest paid professions. Remote or otherwise. To say companies will just go hire someone cheaper assumes they can find someone cheaper. In the end I think the real winners are rural America (or Europe or where ever you live). Having a lifeblood of capital come back to small towns and the like will decentralize our cities, improve our quality of life, reinforce the need for infrastructure, and allow innovation to solve those problems. Exciting times.
      - ericmay 6y ago
        Thanks, Gabe. And I don't think it's SV -> Rural America exclusively. Many of these jobs will filter back into medium to large sized metros across the country. Places like Columbus, Indianapolis, St Louis, Atlanta, Nashville, etc. . There are scores of talented developers in these areas that would be open to remote work, but not relocation to the major metro areas.
        throwaway201103 6y ago
        Not to mention eastern Europe, South America, Asia, etc.
- throwaway45349 6y ago
  > Increase taxes on the wealthy, etc. Anyone working for a Silicon Valley company as an engineer is almost certainly considered "the wealthy" by most of America.
  - ericmay 6y ago
    Yep.
  - sandworm101 6y ago
    >> Anyone working for a Silicon Valley Depending on your definition of wealthy, "anyone working" full stop. A large number of americans do not work (too young/old etc). Others are sick. Many at the top of society don't earn much income (tax voodoo). And automation is coming. If we define "wealthy" as the top 25/15/10% of wage earners, how soon before that is basically just anyone with a fulltime job?
    - iso1631 6y ago
      Wealthy is about how much wealth you have, not your income. In 2020, $121,411 was the median household net worth in the United States. This is up from $97,225.55 in 2017. The average household net worth in 2020 was $746,821. It was $692,100 in 2017. The disparity between these two numbers is itself a major problem, but not the point. If you have a net work of $120k you aren't wealthy, even if you earnt that all in the last month. The way you get from having no wealth to having an average amount is by working harder and earning more. However the tax system is built to punish people who earn more money from work, and reward people who gain more wealth through things like capital gains -- you pay more tax if you increase your wealth by a dollar from working than from the side-effect of being already wealthy and seeing your assets gain value. You're also far more likely to have higher outgoings if you're working (higher cost to live near a high paying job, commuting costs etc) If you are on the median ohio wage on 37k a year, so $30,427.47 net, and spending 37k to live, your wealth doesn't increase. If you work an extra 1k, you take home $31,202.47 -- $775, 22.5% tax. If you make 1k in capital gains, you keep $971, 3% tax. Look at twice median wage of 74k a year. Take home 57,439.49. Extra $1k will give you 58,109.69, an extra $670 - 33% tax. Make 1k in capital gains and you pay 18% tax. Earn 10 times the median wage at $370k and you keep 239,713.20, 42% tax. Get 1k in capital gains and you keep $764, 24% tax. https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/ https://www.thebalance.com/breakdown-of-average-monthly-household-expenses-4687519 https://www.thebalance.com/breakdown-of-average-monthly-hous... https://goodcalculators.com/us-salary-tax-calculator/ohio/ https://goodcalculators.com/us-salary-tax-calculator/ohio/ https://smartasset.com/investing/capital-gains-tax-calculator https://smartasset.com/investing/capital-gains-tax-calculato...
- bendbro 6y ago
  > 1. Americans need to buy and hold equities. Period. When Google cuts costs or makes more money, I benefit as a shareholder (or you can hold total market indexes and the like). Yes, but it is not good that your "compensation" will be coming from something that isn't tied to your job performance. Wages at least have some tenuous connection to how well you perform at work. > 2. Maybe the money will go to new hires, capabilities, expenditures, etc. ? Based on recent trends, this will not happen. > 3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like. Yes, definitely. > 4. Increase taxes on the wealthy, etc. Yes, or nationalize the banks.
  - ericd 6y ago
    Why is it bad that part of your compensation comes from things that aren't tied to your performance at work?
  - Proziam 6y ago
    > Yes, but it is not good that your "compensation" will be coming from something that isn't tied to your job performance. Wages at least have some tenuous connection to how well you perform at work. It also doesn't account for the fact that these equities can lose substantial value, or may be over-valued. > Yes, or nationalize the banks. Re-implement the Glass-Steagall Act, or similar. Nationalization leaves the levers of power in the hands of the wrong people. Keeping commercial and investment banking separate while implementing strong consumer protections was shown to work well in the past. Also, it has shown that the repeal massively reduced the amount of banks (killing competition) so it stands to reason that trend could be reversed and improve the consumer banking experience over time.
- jelliclesfarm 6y ago
  > 4. Increase taxes on the wealthy, etc. This won’t work. When the tech exodus begins, it’s going to cause CA to buckle at its knees because the wealthy has been subsidizing more than 80% of the population. It is not sustainable or healthy at all to suckle at the teat of the wealthy. We should abolish all taxes and only retain taxes based on consumption. And a flat modest capital gains tax. With dedications gone, this might actually bring in more public money. Public spending will also decrease if we figure a way out of unfunded pension liabilities. This is huge. Don’t know how it can be resolved.
  - DeRock 6y ago
    > the wealthy has been subsidizing more than 80% of the population CA does not tax wealth, they tax (predominately) income, and I wouldn't be so quick to equate the 2. Prop 13, for example, can mean that wealthy land owners pay almost nothing in tax if they've owned their property for a long time.
    - rcpt 6y ago
      > Prop 13 https://www.taxfairnessproject.org/ https://www.taxfairnessproject.org/ generally the wealthier you are the bigger your tax cut.
CountSessine 6y ago
Maybe? But as things are, most of those generous employee salaries are parasitized by NIMBY landlords and property owners in SFBA who have selfishly engineered SF's horrendous housing supply shortage. If that value is going to be captured by anyone, I would much MUCH rather it be captured by Google shareholders, many of whom are employees and are at least partly responsible for the company's incredible success, than lazy and parasitic SFBA landlords who profit from their own NIMBYism and regulatory predation.
- dpoochieni 6y ago
  Not maybe, it is supply and demand. IF the supply of remote labor does increase then the share of economic profit going to capital also increases. (i.e. Employers keep more of the profits as opposed to sharing)
  - Raidion 6y ago
    This is true both ways though. If you're getting paid 140k, but your rent is 5k a month, you're only capturing 80k of wages, and the landlords are capturing 60k in rent. If you're working remotely for 100k, and paying 1.7k a month in rent, you're capturing ~80k as well. That means more capital is going to the employers(who saves 40k) at the expense of the landlords (who lose out on that 40k). I honestly think I'd rather have the capital go to the employers because a) it improves my value in relation to them (I now can argue that I should get paid more, because I bring in 40k a year more value than I did in SV) AND I have a financial interest in the company doing well (with options/RSUs/bonuses/etc). The money going to the landlords starts to become very literally "rent seeking" where they will capture the capital without providing any productivity gains in return. You could argue that their value in "provide a location for people to live so they can collaborate more effectively" is decreasing with remote work, and they will have to charge less because the value they provide is decreasing.
    - bcheung 6y ago
      The bay area is one of the worse places to have rental properties in the country though in terms of ratio of rental income to mortgage costs. If it wasn't for appreciation most would sell instead of try to rent out homes. Landlords aren't making their money from the rents, they are making it from the appreciation.
deleted 6y ago
[deleted]

eikenberry 6y ago

The one thing people seem to keep forgetting about when talking about this race to the bottom is how hard it is to find good software authors. My company is fully remote and global and it is still really hard to find good people. I really don't see much of a change given the current unmet, and rising, demand.

kbos87 6y ago
Agree with this. If a purely cost driven race to the bottom is inevitable, it already would have happened. I think what’s going on right now increases the competition for roles that some people may have previously had a geographic advantage over others in obtaining, but I don’t think this means that advantage is gone, nor do I think it’s a zero sum game. There may be some downward wage pressure, but if cost was your only motivator as an employer, you were probably already hiring remote teams in low cost markets.
heavyset_go 6y ago
I hear this a lot from employers, but more often than not, they are not willing to offer competitive compensation for the level of talent they wish to attract.
- gwright 6y ago
  That is just another way of saying that good talent is scarce.
NonEUCitizen 6y ago
How much does your company pay?
aborsy 6y ago
I think you greatly underestimate global talent for some reason.
- eikenberry 6y ago
  I think you greatly underestimate the global demand.

shoguning 6y ago

> The bottom is still decently high even in Midwest cities Yes, and I also see the push for remote work also affecting the demand side of the software labor market as well as the supply. There will be even more push for good collaboration/communication work process software. It's still a fast growing market.

kodah 6y ago

Former Texan here! You will not get RSU's or bonuses as an engineer in Texas. You will get cash and insurance. If you doubt me, feel free to go on an interview and ask about those things! I can tell you there's a reason I left Texas and it's because cash doesn't do to your savings what RSU's and bonuses will.

ericmay 6y ago
Companies here in Ohio do both RSU and bonuses. Sometimes one or the other, sometimes a mix as part of total compensation.
brandonscott 6y ago
I'm an engineer in Austin. We definitely get bonuses and I have RSUs at my current company.
- kodah 6y ago
  It's good to hear that's changed. When I was in Dallas that was certainly not the case.