4 ms·
There are many more feedback loops than meets the eye and not only corporations are rational economic actors. The in-demand talent tends to move to high CoL loc
by t8sr 3y ago
There are many more feedback loops than meets the eye and not only corporations are rational economic actors. The in-demand talent tends to move to high CoL locations. Former low CoL locations become high CoL when successful. Especially when a high and low CoL location are adjacent, this tends to happen quickly (e.g. Germany and Switzerland, Malaysia and Singapore, US and Mexico.)
The reverse is also true - people in high CoL locations tend to move out when their skillset no longer commands top compensation.
In other words, I think the available workforce, to at least some degree, sorts itself into expensive and cheap locations based on what skills are in demand.
To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit, and it's a 90 minute flight. Why wouldn't they take it?
- wallon_brux 3y agoI get your point, but you actually need a work permit for both london and switzerland
- t8sr 3y agoYou're right about London, although I explored it not long ago, and having an EU/EFTA passport and a job in tech seemed to basically guarantee it. As for Switzerland, you don't need it. As the Swiss government itself says: "Thanks to freedom of movement, citizens of EU/EFTA member states can enter, live and work in Switzerland.". [1]: https://www.ch.ch/en/foreign-nationals-in-switzerland/working-in-switzerland/#citizens-of-euefta-member-states https://www.ch.ch/en/foreign-nationals-in-switzerland/workin...
- berdario 3y ago> To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit They actually need a work permit for London (it's not EU anymore). I believe that for Switzerland there might also be requirements for the employer to state that they couldn't find talent in the country, before extending an offer to foreign nationals (including EU: Switzerland is not EU, though it's part of Schengen... And thus EU citizens have freedom of movement) But your point stands... I think that fiefdom building, and needing teams close to where the execs (and/or investors) work and live is the other big reason why companies hire in high COL areas
- mahkeiro 3y agoNo there is no limitation in Switzerland for EU citizen, only specific domains (like waiter, hairdresser) where unemployment is above 5% must be first announced at local job agency, but you are still free to hire whoever you want. Btw free movements is not linked to Schengen but to bilateral agreements between CH and EU that entered in force before Schengen. https://www.eda.admin.ch/missions/mission-eu-brussels/en/home/key-issues/free-movement-persons.html https://www.eda.admin.ch/missions/mission-eu-brussels/en/hom...
- theGnuMe 3y agoWell you have to live in London which may not be feasible regardless of the pay.
- t8sr 3y agoHah, indeed. Before Brexit, I used to take the Northern line in rush hour and it cured me of any desire to live in London, unless I can walk to work.