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I have a new conspiracy theory on RTO in Big Tech. Much has been said about commercial real estate. But I think getting highly capable people to work hard for y

I have a new conspiracy theory on RTO in Big Tech. Much has been said about commercial real estate. But I think getting highly capable people to work hard for you is a difficult problem & something tech executives put a lot of thought into. If you don't pay people enough, someone else will. But if you pay them too much, they'll become financially independent. Mid six figures is an objectively life-changing amount of money that an engineer would be insane to walk away from & that few companies can match. But because it's contingent on living in places where the "working rich" are on the lower half of the housing market totem pole, housing will always place significant pressure even on an obscene income, and your home will never be quite satisfactory. It keeps you on the treadmill working harder and longer, worrying about the stock price, chasing the next promotion or refresher so that you can afford a little more light, a little more space, a little less commute time. And that's right where they want you. Location independence means people could actually get their fill of "TC" which would make it difficult to keep them sweating over such uninspiring projects.

mattgreenrocks 3y ago
Yep. Hence the economic alarms about salaries being “too high”: remote work enables geo-arbitrage, which removes a significant portion of employer leverage. If employees could buy their way out of the system, then, by definition, capital is leaving power and money on the table. And it absolutely loathes that.
- evantbyrne 3y ago
  They get what they pay for. Companies that offer remote jobs will be able to pick from and retain a wider gamut of talent. I suspect a lot of this RTO is related to the tech market just generally being down. Once things heat back up, recruiters will be knocking down doors to get people to interview for remote gigs just like before. It may take some time to get to that point though, because there are a number of factors at play currently that could prolong the depression in tech.
  - closeparen 3y ago
    My contention is they won’t be able to sustain it, because either the wages will be uncompetitive or remote workers will pay off their houses and no longer need to work (as much).
    - deleted 3y ago
      [deleted]
    - evantbyrne 3y ago
      Wages aren't even close to being high enough that companies won't able to afford workers. Developers in the standard ranges don't even need to consider what a company can afford when doing salary negotiations. With the exception of small businesses, it's about what they are _willing_ to pay, not what they are able to.
      - closeparen 3y ago
        I'm not saying they can't afford high wages. I'm saying levels.fyi-scale wages for a few years in a normal housing market would leave an employee much pickier about companies/projects/conditions vs. someone who still needs to grind hard for his first 1BR in New York or San Francisco.
LapsangGuzzler 3y ago
I don’t think it’s really a conspiracy theory, this a fundamental aspect of American capitalism. Health insurance is a perfect example of a carrot that companies want to maintain control over in order to maintain a dedicated workforce. By keeping “affordable” (eye roll) access to healthcare tied to a full time job, they keep butts in seats. This isn’t new or isolated to tech companies. It’s always been about maintaining control from the top.
- benjaminwootton 3y ago
  I’ve always thought this. Having healthcare primarily accessible through your job must be a strangely subservient place to be. You could literally die if you lose or leave your job! Im not one for conspiracy theories, but that’s a great position for governments and big business to find themselves in!
  - lotsofpulp 3y ago
    Health insurance equivalent to what an employer subsidizes is pretty accessible without the employer at healthcare.gov, but the tax deductibility is not if you are working for an employer too small or cheap to offer or, or not employed at all. The premiums just happen to be very expensive (even for the employers’ subsidy portion) to the tune of $10k/$30k+ per individual/family.
- usaar333 3y ago
  Healthcare is just another cost in your life and you should view the benefit as part of your TC. It's only slightly distorted here in that companies can use pretax money but it isn't like it's a small expense to companies either. I've personally never used Cobra, because it is in fact cheaper to buy individual plans.
  - pharmakom 3y ago
    Ironically making it pretax harms employees long term by making them more dependent on the employer for healthcare
csomar 3y ago
It's not a conspiracy theory, it's how the system works. You are taxed on pretty much all of your income either from the state, the landlord, the credit card company or the lifestyle obligations that stems from the area you are living in. > And that's right where they want you. This is the part where we diverge, and I think where people confuse emerging phenomena for conspiracy. There is no one orchestrating this.
- bluefirebrand 3y ago
  > There is no one orchestrating this. I think there are thousands of people orchestrating this, independently.
  - csomar 3y ago
    That's kinda what an emerging phenomena is.
    - bluefirebrand 3y ago
      My point is that it's still the result of human action, it's purposeful and intentional. It's just not conspiracy. It's not emergent out of nowhere. It's emergent out of shitty people being in positions of power and influence.
      - johnnyanmac 3y ago
        >it's still the result of human action, it's purposeful and intentional. Orcheastras imply a conductor, a central figure with the score to direct their symphony to play. 1000 conductors means there is no conductor. Each one may have a purpose and intention, but a conspiracy implies... well, conspiring. That isn't a conspiracy, it's a mob. Even if somehow the symphony manages to make a melody out of the madness, it's not a result of a conspiracy because it never happened.
        JPws_Prntr_Fngr 3y ago
cmrdporcupine 3y ago
The last 40 years of economic policy has been about aggressively loosening restrictions on capital movement, while keeping in place or strengthening restrictions on the movement of labour. The WFO wave was an disruption in that cycle. But only for the professional class. It won't last, at least not for the lower end of the market.
dougmwne 3y ago
Yes, I think you’ve really got it there. The federal government is absolutely trying to orchestrate this situation for the benefit of companies. They try to keep unemployment at a sweet spot number where not too many people are living on the street, but companies have a pliable and plentiful labor pool. It’s achieved through a careful balance of monetary policy, taxes, immigration, education, and laws limiting reproductive choice. The CEO of every Fortune 500 is working towards the same in their own realms, such as all the lobbying that tech companies do on H1-b visas. But at the same time, we also have a brutally efficient marketing and advertising discipline that taps into our emotional biology and keeps people wanting more and always looking over their shoulder at what everyone else has. I’ve thought before that by default, most people will be pushed to work ceaselessly, barely affording everything they think they should have and saving nearly nothing. It takes a choice to and self denial to step off that treadmill and start building the wealth that can set and individual free from living off their labor. Remote work is a huge threat because of geo-arbitrage. Clever employees can quickly get ahead of then saving curve and throw off the reigns. Hungry employees are the easiest to manage. Fat employees have the power to say no.
- catmanjan 3y ago
  Is it really possible for an individual to “build wealth” without exploiting the working class
  - mattgreenrocks 3y ago
    Save 50% of your gross salary, invest in index funds, and be patient. You can speed up the process via geo-arbitrage, climbing the career ladder without lifestyle creep, working at a FAANG, being more frugal, or side hustles. Search for FIRE for more details. It’s not easy by any stretch.
    - pharmakom 3y ago
      Let's be honest, it's only possible for people with rare skills and/or prestigious credentials (which are largely a function of your parents social class). Earning median wage most of that goes towards rent. There's nothing left to save. Move further away and you lose big on earnings.
base698 3y ago
I assume everyone had roughly the same thought around 2012. Mid sized city jobs paying 100k+ and you could still find homes with half an acre for $300k. As salaries got inflated due to FAANG and startup competition it really seemed like an easy out was just keep a lower cost place or rent. The dream of WFH was find a HCOL job and buy LCOL place and a helicopter or maybe just save for retirement at 45. Now given the cost of living increases, the $300k places push $900k in midsized cities. The HCOL areas have gone up in value and the mortgage due to interest is almost twice as high over 2019. Assuming a $15-$20k net take home the housing will be half of it. Grocery bills seem about twice as high. Even with much higher salaries it seems like everything has been squeezed back to the 2012 math. Not everyone ended up riding the salary train and it's even harder form them. And that's assuming you get to keep your job in the shuffle back to the office/layoffs.
mfDjB 3y ago
Thanks for posting this. I always found it odd that the transition from labour to capital seemed to be so hard, even with mid-figure 6 income TC's it always seemed like you can't quite escape the rat race, you can definitely live more comfortably, or maybe as comfortably as you can as one of the rats in the race but never escape. Of course with very disciplined saving and LCOL arbitrage you stand a chance, however it seems like these methods are being purged with COL adjustments, inflation purging cash savings, markets tanking 401k's. Just when you think you are out they pull you back in. I often wondered whether this was by design, because it seems a bit too convenient for labour pools, or whether its a feature of the economic system we operate in.
- hagbarth 3y ago
  Seems to me that it’s central to the economic system we live in. If advancing from labour class to capital class was not very very hard, there would be far fewer workers, which is untenable in our society.
  - closeparen 3y ago
    Labor demand was sluggish for a decade after 2008, it’s only now that the economy wants a lot of workers.
dclowd9901 3y ago
This is too “brilliant villain”. Too many chain links of logic to actually implement and make work. I suspect it’s the far more evil banality of “we paid for this office space and it’s pretty awkward to explain to the board why we have this red line item for a ‘10 year lease - office space’ and nobody is in there, so let’s just force 100s of people to come back in against all common sense and metrics that show this is a bad idea.”
- deleted 3y ago
  [deleted]
- closeparen 3y ago
  That’s surely a factor for remote work in particular, but we must also ask why engineering orgs that embrace globally distributed sites & happily span SF, SEA, and NYC allow for so few seats in places like Chicago, the Triangle, or the Sun Belt. It’s cheaper & the collaboration setup is no different!
pessimizer 3y ago
https://www.barbaraehrenreich.com/titles/barbara-ehrenreich/fear-of-falling/9781455543755/ https://www.barbaraehrenreich.com/titles/barbara-ehrenreich/... Fear of Falling by Barbara Ehrenreich.
JSavageOne 3y ago
Very well said. Forcing employees to live in high cost of living locations and commute to an office reduces employee leverage. High housing prices keep you on the treadmill and dependant on your employer. Employers want you to be dependent on them
frays 3y ago
Fascinating and thought provoking "conspiracy". Thanks for sharing.

mattgreenrocks 3y ago

Yep. Hence the economic alarms about salaries being “too high”: remote work enables geo-arbitrage, which removes a significant portion of employer leverage. If employees could buy their way out of the system, then, by definition, capital is leaving power and money on the table. And it absolutely loathes that.

evantbyrne 3y ago
They get what they pay for. Companies that offer remote jobs will be able to pick from and retain a wider gamut of talent. I suspect a lot of this RTO is related to the tech market just generally being down. Once things heat back up, recruiters will be knocking down doors to get people to interview for remote gigs just like before. It may take some time to get to that point though, because there are a number of factors at play currently that could prolong the depression in tech.
- closeparen 3y ago
  My contention is they won’t be able to sustain it, because either the wages will be uncompetitive or remote workers will pay off their houses and no longer need to work (as much).
  - deleted 3y ago
    [deleted]
  - evantbyrne 3y ago
    Wages aren't even close to being high enough that companies won't able to afford workers. Developers in the standard ranges don't even need to consider what a company can afford when doing salary negotiations. With the exception of small businesses, it's about what they are _willing_ to pay, not what they are able to.
    - closeparen 3y ago
      I'm not saying they can't afford high wages. I'm saying levels.fyi-scale wages for a few years in a normal housing market would leave an employee much pickier about companies/projects/conditions vs. someone who still needs to grind hard for his first 1BR in New York or San Francisco.

LapsangGuzzler 3y ago

I don’t think it’s really a conspiracy theory, this a fundamental aspect of American capitalism. Health insurance is a perfect example of a carrot that companies want to maintain control over in order to maintain a dedicated workforce. By keeping “affordable” (eye roll) access to healthcare tied to a full time job, they keep butts in seats. This isn’t new or isolated to tech companies. It’s always been about maintaining control from the top.

benjaminwootton 3y ago
I’ve always thought this. Having healthcare primarily accessible through your job must be a strangely subservient place to be. You could literally die if you lose or leave your job! Im not one for conspiracy theories, but that’s a great position for governments and big business to find themselves in!
- lotsofpulp 3y ago
  Health insurance equivalent to what an employer subsidizes is pretty accessible without the employer at healthcare.gov, but the tax deductibility is not if you are working for an employer too small or cheap to offer or, or not employed at all. The premiums just happen to be very expensive (even for the employers’ subsidy portion) to the tune of $10k/$30k+ per individual/family.
usaar333 3y ago
Healthcare is just another cost in your life and you should view the benefit as part of your TC. It's only slightly distorted here in that companies can use pretax money but it isn't like it's a small expense to companies either. I've personally never used Cobra, because it is in fact cheaper to buy individual plans.
- pharmakom 3y ago
  Ironically making it pretax harms employees long term by making them more dependent on the employer for healthcare

csomar 3y ago

It's not a conspiracy theory, it's how the system works. You are taxed on pretty much all of your income either from the state, the landlord, the credit card company or the lifestyle obligations that stems from the area you are living in. > And that's right where they want you. This is the part where we diverge, and I think where people confuse emerging phenomena for conspiracy. There is no one orchestrating this.

bluefirebrand 3y ago
> There is no one orchestrating this. I think there are thousands of people orchestrating this, independently.
- csomar 3y ago
  That's kinda what an emerging phenomena is.
  - bluefirebrand 3y ago
    My point is that it's still the result of human action, it's purposeful and intentional. It's just not conspiracy. It's not emergent out of nowhere. It's emergent out of shitty people being in positions of power and influence.
    - johnnyanmac 3y ago
      >it's still the result of human action, it's purposeful and intentional. Orcheastras imply a conductor, a central figure with the score to direct their symphony to play. 1000 conductors means there is no conductor. Each one may have a purpose and intention, but a conspiracy implies... well, conspiring. That isn't a conspiracy, it's a mob. Even if somehow the symphony manages to make a melody out of the madness, it's not a result of a conspiracy because it never happened.
      - JPws_Prntr_Fngr 3y ago

cmrdporcupine 3y ago

The last 40 years of economic policy has been about aggressively loosening restrictions on capital movement, while keeping in place or strengthening restrictions on the movement of labour. The WFO wave was an disruption in that cycle. But only for the professional class. It won't last, at least not for the lower end of the market.

dougmwne 3y ago

Yes, I think you’ve really got it there. The federal government is absolutely trying to orchestrate this situation for the benefit of companies. They try to keep unemployment at a sweet spot number where not too many people are living on the street, but companies have a pliable and plentiful labor pool. It’s achieved through a careful balance of monetary policy, taxes, immigration, education, and laws limiting reproductive choice. The CEO of every Fortune 500 is working towards the same in their own realms, such as all the lobbying that tech companies do on H1-b visas. But at the same time, we also have a brutally efficient marketing and advertising discipline that taps into our emotional biology and keeps people wanting more and always looking over their shoulder at what everyone else has. I’ve thought before that by default, most people will be pushed to work ceaselessly, barely affording everything they think they should have and saving nearly nothing. It takes a choice to and self denial to step off that treadmill and start building the wealth that can set and individual free from living off their labor. Remote work is a huge threat because of geo-arbitrage. Clever employees can quickly get ahead of then saving curve and throw off the reigns. Hungry employees are the easiest to manage. Fat employees have the power to say no.

catmanjan 3y ago
Is it really possible for an individual to “build wealth” without exploiting the working class
- mattgreenrocks 3y ago
  Save 50% of your gross salary, invest in index funds, and be patient. You can speed up the process via geo-arbitrage, climbing the career ladder without lifestyle creep, working at a FAANG, being more frugal, or side hustles. Search for FIRE for more details. It’s not easy by any stretch.
  - pharmakom 3y ago
    Let's be honest, it's only possible for people with rare skills and/or prestigious credentials (which are largely a function of your parents social class). Earning median wage most of that goes towards rent. There's nothing left to save. Move further away and you lose big on earnings.

base698 3y ago

I assume everyone had roughly the same thought around 2012. Mid sized city jobs paying 100k+ and you could still find homes with half an acre for $300k. As salaries got inflated due to FAANG and startup competition it really seemed like an easy out was just keep a lower cost place or rent. The dream of WFH was find a HCOL job and buy LCOL place and a helicopter or maybe just save for retirement at 45. Now given the cost of living increases, the $300k places push $900k in midsized cities. The HCOL areas have gone up in value and the mortgage due to interest is almost twice as high over 2019. Assuming a $15-$20k net take home the housing will be half of it. Grocery bills seem about twice as high. Even with much higher salaries it seems like everything has been squeezed back to the 2012 math. Not everyone ended up riding the salary train and it's even harder form them. And that's assuming you get to keep your job in the shuffle back to the office/layoffs.

mfDjB 3y ago

Thanks for posting this. I always found it odd that the transition from labour to capital seemed to be so hard, even with mid-figure 6 income TC's it always seemed like you can't quite escape the rat race, you can definitely live more comfortably, or maybe as comfortably as you can as one of the rats in the race but never escape. Of course with very disciplined saving and LCOL arbitrage you stand a chance, however it seems like these methods are being purged with COL adjustments, inflation purging cash savings, markets tanking 401k's. Just when you think you are out they pull you back in. I often wondered whether this was by design, because it seems a bit too convenient for labour pools, or whether its a feature of the economic system we operate in.

hagbarth 3y ago
Seems to me that it’s central to the economic system we live in. If advancing from labour class to capital class was not very very hard, there would be far fewer workers, which is untenable in our society.
- closeparen 3y ago
  Labor demand was sluggish for a decade after 2008, it’s only now that the economy wants a lot of workers.

dclowd9901 3y ago

This is too “brilliant villain”. Too many chain links of logic to actually implement and make work. I suspect it’s the far more evil banality of “we paid for this office space and it’s pretty awkward to explain to the board why we have this red line item for a ‘10 year lease - office space’ and nobody is in there, so let’s just force 100s of people to come back in against all common sense and metrics that show this is a bad idea.”

deleted 3y ago
[deleted]
closeparen 3y ago
That’s surely a factor for remote work in particular, but we must also ask why engineering orgs that embrace globally distributed sites & happily span SF, SEA, and NYC allow for so few seats in places like Chicago, the Triangle, or the Sun Belt. It’s cheaper & the collaboration setup is no different!

pessimizer 3y ago

https://www.barbaraehrenreich.com/titles/barbara-ehrenreich/fear-of-falling/9781455543755/ https://www.barbaraehrenreich.com/titles/barbara-ehrenreich/... Fear of Falling by Barbara Ehrenreich.

JSavageOne 3y ago

Very well said. Forcing employees to live in high cost of living locations and commute to an office reduces employee leverage. High housing prices keep you on the treadmill and dependant on your employer. Employers want you to be dependent on them

frays 3y ago

Fascinating and thought provoking "conspiracy". Thanks for sharing.