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Ask HN: Is Bay Area in a tipping point for tech talent?
Some younger companies like Coinbase[2] and Stripe[1] are sharing numbers that they are not hiring much in the Bay Area anymore.
I am assuming that many positions that require the candidate to (eventually) relocate to the Bay Area are not getting a lot of traction. A fried of mine refused to interview for position like that despite being very junior! She decided the cost of living is not worth it.
What all of this means for the Bay Area talent pool and job market? Talent in the Bay Area are fetching astonishing pay ($600k for L6)[3] which I believe contributed to the out of the ordinary housing market in the Bay Area when you compare it to other cities in CA like San Diego and Los Angeles. I know many older talent have grown roots in the area. They have kids and friends which means they can't easily move. What if with this new wave of remote work acceptance, Bay Area pay won't match the expenses? Companies can hire everywhere in the U.S. for arguably the same talent quality. Some companies are even expanding to Mexico City[4] and other countries which might put even more pressure on Bay Area salaries.
Are we at an end of decades of continues growth and competition in the Bay Area? Will there be big pay adjustments?
[1] https://twitter.com/brian_armstrong/status/1481129589761998857 https://twitter.com/brian_armstrong/status/14811295897619988...
[2] https://twitter.com/patrickc/status/1480647701221896195 https://twitter.com/patrickc/status/1480647701221896195
[3] https://levels.fyi https://levels.fyi
[4] https://www.lyft.com/careers#openings?location=mexico%2520city%252C%2520mexico https://www.lyft.com/careers#openings?location=mexico%2520ci...
- f0e4c2f7 5y agoIt's hard to say for sure but I think probably yes. It was essentially an accident that the bay area tech scene ever existed at all and other than nerds writing code and VC's getting rich I don't know how much residents of the area even liked it. The way to make the bay sustainable is to build taller buildings for people to live in. However this isn't especially popular and even if it was, there is enough bureaucratic cover for a minority to stall it off indefinitely. I think if you could do that in the next 20 years the bay could maintain it's hegemony. Seems exceedingly unlikely to me. I suspect it will keep enough momentum to beat out most markets for some time to come, though already by a smaller margin and with a seemingly worse quality of life these days.
- nathanyz 5y agoNIMBY is why you can't have affordable housing in the Bay Area. There are many areas in the US that are essentially a "better deal" for techies if you can work remote.
- baskethead 5y agoFalse. Is supply and demand and income inequality. Ever since the global internet companies became ludicrously rich, more and more engineers with outsized wallets have squeezed everyone else out. It’s always been expensive and there has always been NIMBYs but it’s been crazy since 2010. It takes one or two houses to change the comps in a neighborhood. I sold my house last year. Two married Google engineers came in $250k above everyone else, which was already $500k above list. We found another all-cash offer that was willing to go 50k above the Google engineers so we sold for $800k above list. Ever since then the house prices in that neighborhood are 300k above those prices. So the price in the neighborhood jumped $1M last year. Saying it’s nimbyism is stupid. It’s capitalism.
- colinmhayes 5y agoThey're willing to pay that much because there isn't enough housing in the bay. If the neighborhood was denser prices would be lower. There aren't an unlimited number of people looking to buy multi million dollar homes in silicon valley.
- nathanyz 5y agoYou wouldn't have as much supply problem without the NIMBY's -AND- it is capitalism. Capitalism is the market reacting to limited supply and high demand. Limited supply is caused by NIMBY, and high demand is caused by tech company hiring & growth. Both are true.
- et-al 5y agoNIMBYism is human reluctance to change manifested. Housing prices in Austin, Raleigh/Durham/Cary, Pittsburgh, Boulder, Bend are becoming unaffordable to folks who were there 10 years prior. And I wouldn't be surprised if existing residents are complaining about the influx of new transplants. It's tough to predict housing demands and tougher to build infrastructure and houses fast enough for these population changes. However to f0e4c2f7's point, I agree that unless the Bay Area mitigates its high rents, the region will stagnate. High CoL and creativity are inversely related.
- PragmaticPulp 5y agoExpanding out of the Bay Area has been standard practice basically forever. Unless a company has infinite budgets and plans to maintain small org sizes forever, keeping your entire workforce in the Bay Area doesn’t really scale. The real question to ask is: Where are these new jobs? Remote? Satellite offices? New foreign offices? Remote is the hot topic, but I haven’t actually seen as many remote listings as I expected given all of the talk. For many of these companies, it could be as simple as opening new offices in other cities. If they’re opening offices in expensive locations like Seattle or NYC then it’s not really about cost of living. On the other hand, if they really are embracing remote and hiring out of non-traditional locations then maybe it is more about cost of hiring. However, in that case I’ve personally experienced companies become eager to skip the US altogether and start hiring in even cheaper international locations with untapped talent. It’s complicated. > Talent in the Bay Area are fetching astonishing pay ($600k for L6) While it’s true that top Bay Area engineers can fetch $600K, it’s much more rare than it can look. Take a look at the median compensation for software engineers in the Bay Area some time. It’s a fraction of that number. Those ultra high paying FAANG jobs aren’t the typical software job, even in the Bay Area. > A fried of mine refused to interview for position like that despite being very junior! She decided the cost of living is not worth it. Top Bay Area compensation should be enough to offset the higher cost of living for someone living in an apartment. The cost of living for something like a 1 or even 2-bedroom apartment is negligible for someone who can get into a FAANG job in the Bay. On the other hand, taking a median software job in the Bay Area is definitely not worth the cost of living increase, IMO, unless you’re using it as a pivot into a FAANG level job later.
- jakub_g 5y ago> Remote is the hot topic, but I haven’t actually seen as many remote listings as I expected given all of the talk. Many companies don't openly advertise remote for all positions, but companies are so starved for experienced talent that if a good remote candidate applied with 5+ yr exp, they would be very happy to consider it (modulo restrictions in timezone / country due to paperwork involved)
- ssharp 5y ago
- jdavis703 5y agoI believe remote work has two futures. The first is many companies will return to requiring a majority of time in the office. There are admittedly hard to measure reasons management will want back in the office, and the first is productivity (I don’t mean how much an IC produces, but how much revenue per employee a firm generates). The second future is all our tech jobs get offshored, similar to what happened after the dotcom bubble burst. I believe that companies will probably wind up going to future #1. Or at least companies that are heavily invested in R&D. There will probably be more satellite offices and more geographically distributed tech startups. But in the first future I believe SF and Silicon Valley will still serve as one of the largest tech employment hubs. For example NYC is still a major financial hub, despite major top-25 US banks being headquartered in places like Texas, Virginia and North Carolina. Edited to comply with Dang’s reminder of site guidelines.
- rootusrootus 5y ago> I believe that companies will probably wind up going to future #1 I agree. There is some temporary leverage tech employees have right now, but as it fades, the inexorable pressure will be to return to the office a significant amount of the time. Middle managers at many companies exist primarily to build kingdoms, and they like to see their subjects.
- weatherlite 5y agoHmm really not agreeing here. It's gonna be a huge deal breaker for many talented devs. 1-2 days a week in office sure, but more than that? You will lose a lot of people for very little gains.
- rootusrootus 5y agoSure, right now, I think you're right. But I don't think the leverage will last. And I expect there to be a bifurcation between what you can earn remotely and what you can get if you're willing to come into the office, and that will bring a number of people back into the office as well. I think we will see a permanent increase in remote work, but I don't think the level we see now will persist for more than a couple years.
- baskethead 5y agoNo. Once the pandemic is over, startups that are in-office will be more productive and faster than bigger companies. The bigger companies will notice this, and force in-person/in-office as well and remote will quickly devolve. Remote is survivable, mainly because of the pandemic, but it’s not preferable for business. In-office is much more efficient and it will be immediately evident once it is enforced.
- jstx1 5y agoThat's my personal experience too - that my team and I are more productive when we work from the same office. I don't know how realistic it is for everyone to return to the office though - many other people like remote and most people are kind of entrenched in their positions.
- endisneigh 5y agoYou make a lot of questionable assertions. Why would being in office be more efficient?
- trinovantes 5y agoI'd assume it'd be easier to build camaraderie between in-person coworkers than faceless Slack names. Coworkers that know each other well can probably collaborate better
- drchopchop 5y agoYou can solve that with occasional, in-person team meetups (a few times per year). Meeting people in person, at least once, is valuable. It improves communication, helps people feel assimilated to the company and team, and creates a mental image of a three-dimensional co-worker (instead of just a faceless Slack handle) Sitting physically next to people every day, especially for engineers, is often not valuable. This is especially true for those who have significant commutes or families.
- wreath 5y ago
- pyjarrett 5y agoCOVID forcing remote work was that tipping point. I think it was a lot more tenuous beforehand than generally believed due to the cost of living. Great programmers can come from anywhere with the internet. California has some of the most stringent COVID restrictions in the US, and also the highest costs of living when looking at Bay Area and LA. There's no point to bring people there, especially if they're just going to working from home for the foreseeable future anyways. I've been remote for several years (pre-COVID). For $600k, they could hire 2 or 3 engineers where I live, still doubling or tripling the local tech pay, and give those engineers the opportunity to buy (or build) and pay off a house in a few years.
- jacobolus 5y ago> California has some of the most stringent COVID restrictions in the US, Note that the Bay Area (and SF especially) has had the best Covid outcomes of any metro area in the USA with the exception of Honolulu, with like 1/3 the deaths of most other places. Bay Area Covid response (both government action and individual choices and behavior) has saved a lot of local residents’ lives and prevented a lot of future chronic illness. Or to put it more starkly, if everywhere in the US were as on the ball as the Bay Area, at least 500,000 more Americans would still be alive.
- rossdavidh 5y agoComparing this: https://sf.gov/data/covid-19-cases-and-deaths https://sf.gov/data/covid-19-cases-and-deaths ...to this: https://usafacts.org/visualizations/coronavirus-covid-19-spread-map/state/texas/county/austin-county https://usafacts.org/visualizations/coronavirus-covid-19-spr... ...does not suggest that SF is doing anything extraordinary. Comparing to the national average involves comparing to places like NYC, that got hammered early when the death rate was at its highest.
- jacobolus 5y agoAccording to the NYT, Austin county has had 193 confirmed Covid deaths per 100k throughout the pandemic. San Francisco has had 78 deaths per 100k. So Austin county has had about 2.5x more deaths than SF per capita. Note that Austin county is not related to the city of Austin, Texas. The city of Austin is in Travis county, which has had 118 confirmed Covid deaths per 100k, pretty much the best results anywhere in Texas. (Because people in Austin have also been cautious, and the local government has taken what actions it could despite state-level opposition.)
- egypturnash 5y agoI sure hope so, maybe my friends who grew up in the Bay Area who are not techies will be able to move back home if they want to.
- raldi 5y agoCalifornia’s not even building housing at the rate that existing families are having babies. Even if there were zero in-migration, there still wouldn’t be enough housing for the rising generation.
- kspacewalk2 5y agoThe reason they can't move back is mostly not due to techies inflating housing costs, but due to artificially, deliberately and chronically restricted supply of housing, implemented via policies such as zoning. It's an artificial scarcity that can be undone by legislation, but you need legislators (of both sexes) to grow some balls first.
- sockgrant 5y agoThey’re both issues contributing to rising housing costs.
- epistasis 5y agoHigh wages would not increase housing costs, unless there was insufficient housing. We should be fighting for higher wages everywhere, not limiting them because we gave away all our power to landlords.
- sockgrant 5y agoHigh wages won’t impact a housing market with infinite supply but that’s not reality. When there’s a lack of supply then the top earners set the market. When top earners make more then prices are higher.
- JumpCrisscross 5y ago
- Wheaties466 5y agoI've always understood the alure to the bay area wasn't the talent but the talent with the correct mindset. For example, getting software devs that are willing to work long hours to push out a new release. etc. take this with a grain of salt as i've never been to the bay area.
- whimsicalism 5y agoNo, it's absolutely the talent. You want grinders? Go to NYC
- bdamm 5y agoThe talent tends to be well connected and there are resources everywhere. If you ride a train or drink coffee you will certainly see someone coding there. If your company needs tech services, they are there. If you ask a random adult on any street they can likely explain web services. So not just the talent, not just the mindset, but also the density and availability.
- dmitrygr 5y ago> getting software devs that are willing to work long hours to push out a new release. etc. That is a function of being single, young, and naive, not of location. Once you grow up, you realize that working long hours on someone else's dream while your family needs you is idiotic.
- xyzzy_plugh 5y agoIt's funny that no one wants to admit that Covid-19 was the forcing function for shifting to remote wholesale. I have many peers who have been fighting for internal accessibility of working remotely, most of whom gave up and jumped ship. I even know a few people who left Stripe in 2019 due to their inflexible remote work policies. So to now come out and say "look at all the remote hiring we're doing" sure leaves a bad taste in my mouth. Yeah, because you have no choice! The talent has realized they have all the cards and bargaining power in terms of remote work right now. Anyone who is fighting to return to the office is missing the point. We should all be striving to unlock permanent mobility within our professions.
- ironmagma 5y agoThis is the cynical view. Remember, the reason anyone is looking for work is because they have to work, too. One could go so far as to say the entire human enterprise is carried out by force.
- JumpCrisscross 5y ago> the entire human enterprise is carried out by force This is true not because we are human, but because we are living things.
- ironmagma 5y agoOnly according to the pessimist. It’s arguably less true for humans than for other living things. I can end my life at any point. “The whole world is made of people who didn’t kill themselves today. Life can get very difficult, very sad, very upsetting… but you don’t have to do it. You really don’t have to do it… because you can kill yourself.” Louis CK Any bad thing I have to do, I am putting myself through. Agency is freeing.
- jdreaver 5y agoInteresting, I know folks at Stripe that have been remote since around or before 2019, and one of the reasons I joined Stripe was because of the fantastic remote policies (hint: they are awesome). I wonder if 2019 was a tipping point for remote work at Stripe? The other large companies I've interviewed at for the past couple years definitely felt like they tacked on remote work because of COVID, and I wasn't confident it would last once the pandemic calmed down.
- dccoolgai 5y agoThe "Open Secret" is there was always a "bunched distribution" at the top of the talent scale in SF/Bay Area that really only made it worth it for the FAANG-level orgs over the last decade or so. The top 10-20%? Absolutely better there in terms of talent than anywhere else in the country. Below that, you're just paying 500K when you could get an engineer of equal/better skill anywhere else for 120K. It makes sense for FAANG to lock up that top 20% with 500K salaries... it does not make sense for companies that aren't going to get one of those engineers to try and swim in that pond unless you're making a serious run at being in that level. It really hasn't for the last decade, COVID just made the music stop for a moment and forced everyone to reckon with that.
- JumpCrisscross 5y ago> you're just paying 500K when you could get an engineer of equal/better skill anywhere else for 120K I'm not bullish on the Bay Area. But top 50% engineer sitting next to a top 10% engineer will vastly outperform one alone in the middle of the country.
- dccoolgai 5y agoThe point is rather that _you're probably not getting one of those_ unless you're FAANG. But you're paying them like they are. Anecdotes are not data, but I've personally seen and worked for several mid-size tech companies open SF/Bay offices, plow a ton of cash into them for decidedly mediocre results that they could have gotten for 1/10th of the cost almost anywhere else and then sheepishly/quietly "phase them out".
- richardburton 5y agoCoinbase and Stripe are not startups. They are institutions. The hacker houses here are still rammed to the gills.
- nimblenavigator 5y agoA ton of companies outside FAANG are emerging as both 100% remote and async-first. Of course this doesn't make them perfect but they are succeeding both commercially and culturally. As soon as x number of Zapier's in the world who grew and attracted talent from all over, this will become the default way of working and building companies and the Bay Area will be way less relevant.
- jseliger 5y agoNo one has yet brought up an essential issue: California bans non-competes. https://www.vox.com/new-money/2017/2/13/14580874/google-self-driving-noncompetes https://www.vox.com/new-money/2017/2/13/14580874/google-self.... As long as California does, and most other places allow them, we're going to continue to see surprisingly high levels of startup formation and company success in California, despite all the bad things being true.
- no-s 5y agoI always like to suggest this is the best way to create a startup friendly environment in your state. OTOH I sorta wonder if the investment in semiconductor fabs and sales orgs in say Arizona is partially founded in the lure of effective non-competes.
- strikelaserclaw 5y agoyea but they can form in california but hire remotely, startups can hire talent far cheaper in other regions than the bay area.
- heywintermute 5y ago>As long as California does, and most other places allow them, we're going to continue to see surprisingly high levels of startup formation and company success in California, despite all the bad things being true. If that were truly the case wouldn't a number of other states also be banning non-completes in hopes of attracting businesses? Some quick googling shows only the District of Columbia, North Dakota, and Oklahoma have similar bans on non-competes as California.
- bradlys 5y agoYou gotta have the talent and funding available too. Ain't none of that in ND or OK. Maybe some in DC but that's such a heavily government focused area that I don't know why anyone would do a startup there unless it was government centered.
- lostdog 5y agoStates are not truly serious about nurturing businesses, especially small businesses.
- newaccount2021 5y ago
- csomar 5y agoHow about we look at the numbers?: https://www.zumper.com/blog/rental-price-data/ https://www.zumper.com/blog/rental-price-data/ Y/Y: It looks like NY, SJ have recovered (at least for the single bedroom) while the Bay Area is lagging. Some winners are Miami, San Diego, and Orlando. It seems that Florida has seen the highest rise in rental costs. Some losers are Newark, Virginia, St Louis. It seems the shittier cities have lost the most, and the sunnier/friendlier ones have won. In that sense, San Francisco has done averagely. Based on that, I don't think SF/Bay Area is going downhill as people are imagining. They are doing much better than other places especially that they are already very expensive.
- yummy_box 5y agothat site is full of crap, i live in Miami, and if rents were that high, people couldn't live here, there is not big tech or unicorns paying faang salaries here ma dude.
- strikelaserclaw 5y agoin TX at the moment, jeez the number of people we are gaining is absurd, home prices have increases 40-50% in the last 2 years
- throw8932894 5y agoHow about taxes? In my East-European country I am paying about 10% net on taxes (including social and health, including expenses, excluding VAT). Nothing illegal or offshore, just normal accounting from local semi retired lady. In Cali I would have to juggle with deferred stocks, exit taxes, local taxes, federal taxes etc.. And net salary would be about same.
- RestlessMind 5y agoIn California, you will be paying 30-40% in taxes (Federal, State, Social security etc) if you have a well paying tech job paying more than 250K USD. Even after those taxes, you will be taking home 60% of your pretax income, which is around 150K USD per year. After accounting for very high living costs (3/4K rent, 1/2K living expenses, insurance premiums), you can still have 20-30% of your pre-tax income. Also, if you have heard crazy stories about American healthcare, rest assured that a tech job paying you 250K USD will also offer you very good insurance that you don't have to worry about it generally. I am an immigrant, did this exact calculation and am living a far better lifestyle than what I could ever afford in my home country.
- yummy_box 5y agosomehow you are assuming you can only make 300k in Cali paying 40% taxes?
- throw8932894 5y agoMy estimate is about 50% on 300k/year, just taxes no living expenses. But main reason is tax unpredictability. I would have to pay small fortune on accountants and it still does not guarantee, there wont be fines latter. If you are partially self employed, and receive part of salary in crypto.. Things get complicated very quickly. I am not worried about healthcare. It is just ultra expensive if you want good quality.
- fatnoah 5y agoI've been a part of two large companies that have made a conscious move away from hiring in the Bay Area. For both of these companies, the major drivers were that the market is so saturated there that it's harder to find people there.
- RestlessMind 5y agoFor Stripe/Coinbase, 74%/89% eng hiring out of Bay Area. Today, a lot of that hiring could be happening in other parts of the US. But before you cheer too much about that, consider that the shareholders of those companies are already looking for ways to hire outside US. After all, if your setup can accommodate someone from Kansas, how hard is it to onboard someone from Canada or Mexico? A data point - my company is already hiring more than half of the new hires outside the USA. Or to paraphrase a politician, that whirring sound you are hearing is one of the last remaining sources of good jobs getting sucked out of the country. Previous discussions: https://news.ycombinator.com/item?id=27696235 https://news.ycombinator.com/item?id=27696235 and https://news.ycombinator.com/item?id=29784222 https://news.ycombinator.com/item?id=29784222
- tzs 5y ago> I am assuming that many positions that require the candidate to (eventually) relocate to the Bay Area are not getting a lot of traction. A fried of mine refused to interview for position like that despite being very junior! She decided the cost of living is not worth it. Cost of living is high, but for a junior engineer I think it might be possible for a good case to be made that it is worth it assuming that the junior engineer has a fairly recent bachelor's degree from a good college. One of the lessons you should have learned incidentally while getting your degree is that if your rent and utilities and much of your food are covered and you are busy enough that you don't have a ton of free time you can get by for at least 4 years without having much extra money. The median household income in San Francisco is $112k per year. The average household size is 2.26 persons. This means that half the households in San Francisco are getting by on less than $112k per year. That's for everything--rent/mortgage, food, utilities, insurance, transportation, clothes, entertainment. I'd consider if I was a junior engineer taking the San Francisco job if it paid significantly more than $112k, and then for the next few years live like I lived in college. Live in the kind of housing that the people who are making under the median household income live in, and everything you make that doesn't go to living in that housing with a lifestyle similar to a college student put in in your 401k or other investments. You already know from college that you can live this way for 4 years and come out OK. If you can just do that for a few more years, you can have some nice savings built up. Then you can figure out if you want to stay in San Francisco but upgrade your lifestyle, or move to someplace cheaper, but with a nice fat portfolio of savings and investments that will serve you very well later.
- freyr 5y ago> out of the ordinary housing market in the Bay Area when you compare it to other cities in CA like San Diego and Los Angeles. Many of the high-paying tech jobs in Los Angeles are consolidated in the Venice Beach area, so-called “Silicon Beach.” If you think you can get an affordable house in the desirable neighborhoods around there (Santa Monica, Manhattan Beach, Venice, Brentwood), you’re in for a shock. You might try heading inland to Inglewood or Culver City to save money, but you’ll be looking at $1.5M houses with bars on the windows. Prices have just gone insane over the last couple years. Plus, if you’re hoping to escape the crime and addicts of the Tenderloin and Market Street, Venice won’t offer much relief.
- black_13 5y ago
- xyzzy21 5y agoWhen you can't address basic Maslow levels (food, housing, etc.) financially, you definitely are incapable to supporting top level Maslow levels which are central to innovation, creativity and improvement. https://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs https://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs The SF Bay Area crossed over that boundary a fairly long time ago. I finally gave up in 2016 after being born and raised in California and have decades of Tech career in the SF Bay Area. It's no longer viable for ACTUAL innovation there. For the most part there is no technology innovation happening in SF Bay Area Tech companies anymore. There is plenty of revolutionary political innovation but nothing in technology and the direction of that is distinct ANTI-innovative. Innovation no longer requires being in the SF Bay Area to be achieved. My recent formation of a new Tech company (in 2016 in upstate NY) and sale/exit in 2018 proves it to me. YMMV of course.