Stripe Will Pay Workers $20k to Leave New York and San Francisco(forbes.com)
forbes.com
Stripe Will Pay Workers $20k to Leave New York and San Francisco
https://www.forbes.com/sites/jackkelly/2020/09/17/stripe-will-pay-workers-20000-to-leave-new-york-and-san-francisco-but-heres-the-catch/#412c4f3f562f
265 comments
> A lot of people are saying this is a bad deal because you don't get to keep your entire TC when you leave the region - you effectively end up losing more TC in the long run. True but like... you also can have way lower expenses for housing... and if you move to a state with no income tax, you might not even lose almost any net income.
It's easier to think of your "total compensation" without taking into account cost of living. Lots of people (esp tech folks) don't have a personal budget and don't keep track of their costs / expenses in nearly the same level of detail that they keep track of their income.
The conventional wisdom on HN (for people who aren't going to be founding companies) is that if you join bigco FAANGs and bounce around among them for 20-30 years, you'll end up with way higher expected net worth by retirement than if you play the startup lottery.
Part of this is because of the power of compound interest. You can get that engine started in your early 20s and pour a lot of your "spare" money into it, especially you don't have kids yet.
This same argument applies to lowering your costs. If you live in SF, you could easily be paying $40k/y in rent or $100k/y on a mortgage. If you buy in a small town with 90% of a bay area comp package, you could be plowing all your housing savings into the compound interest machine.
edit: $/y instead of $/mo
It's easier to think of your "total compensation" without taking into account cost of living. Lots of people (esp tech folks) don't have a personal budget and don't keep track of their costs / expenses in nearly the same level of detail that they keep track of their income.
The conventional wisdom on HN (for people who aren't going to be founding companies) is that if you join bigco FAANGs and bounce around among them for 20-30 years, you'll end up with way higher expected net worth by retirement than if you play the startup lottery.
Part of this is because of the power of compound interest. You can get that engine started in your early 20s and pour a lot of your "spare" money into it, especially you don't have kids yet.
This same argument applies to lowering your costs. If you live in SF, you could easily be paying $40k/y in rent or $100k/y on a mortgage. If you buy in a small town with 90% of a bay area comp package, you could be plowing all your housing savings into the compound interest machine.
edit: $/y instead of $/mo
Taxes are bigger, but rent is the only real major difference in costs, and your income starts outpacing whatever the rent difference is between say SF vs Seattle or Reno relatively quickly. Quantified it's about $20-50k/yr in pretax income. $20k being the single person and $50k being the person with kids who goes to public schools.
Definitely a good thing to do during covid times, but you might want to move back after covid is over.
Definitely a good thing to do during covid times, but you might want to move back after covid is over.
> Taxes are bigger, but rent is the only real major difference in costs
Have you ever lived in a small town in, say, Texas for a month? Nearly everything is cheaper there, and not by a little. Gas can be $1.50/gallon instead of $3.89/gallon. Dairy, produce, meat are all cheaper. Utilities/energy is cheaper.
Maybe it doesn't have as big an impact if you don't have kids, but I only have three and man these things eat a lot.
Have you ever lived in a small town in, say, Texas for a month? Nearly everything is cheaper there, and not by a little. Gas can be $1.50/gallon instead of $3.89/gallon. Dairy, produce, meat are all cheaper. Utilities/energy is cheaper.
Maybe it doesn't have as big an impact if you don't have kids, but I only have three and man these things eat a lot.
Have lived in the Midwest. Compared to Cali:
Beef was cheaper. Chicken and pork were same as Cali. Produce was a lot more expensive; regular produce cost the same as organic produce in Cali, and the quality dropped off a cliff in the winter.
Gasoline was cheaper, but the only utility that was cheaper was water. Internet was more expensive. Electricity and (natural) gas was significantly more expensive, because A/C was a must in the summer and heating was a must in the winter.
Car maintenance was much more expensive, since the salt they use to melt the snow is corrosive. House maintenance was more expensive, because the humidity year-round meant increased mold growth.
In order to get cheaper than LA/SF, you had to move to a small town...but you can do the same thing in Cali too; such as by moving to San Bernardino or Sacramento, and you end up with a much higher quality of life than a small town in the Midwest.
Beef was cheaper. Chicken and pork were same as Cali. Produce was a lot more expensive; regular produce cost the same as organic produce in Cali, and the quality dropped off a cliff in the winter.
Gasoline was cheaper, but the only utility that was cheaper was water. Internet was more expensive. Electricity and (natural) gas was significantly more expensive, because A/C was a must in the summer and heating was a must in the winter.
Car maintenance was much more expensive, since the salt they use to melt the snow is corrosive. House maintenance was more expensive, because the humidity year-round meant increased mold growth.
In order to get cheaper than LA/SF, you had to move to a small town...but you can do the same thing in Cali too; such as by moving to San Bernardino or Sacramento, and you end up with a much higher quality of life than a small town in the Midwest.
I have noticed LA has waaay more cheap food options than Chicago, where any full meal is going to start around $12 with tax, even at like divey local Mexican places. Go someplace a little "nicer" or add one thing to your order and you're at $18-$22 a meal easily.
In LA with a little effort you can find endless Asian/Mexican options for sub-$10.
In LA with a little effort you can find endless Asian/Mexican options for sub-$10.
One more essential data point, liquor is way cheaper in CA than the midwest.
Taxes and rent are still bigger. For a senior FAANG engineer making $400k a year, CA income taxes are nearly $40k/year, and rent on a house is perhaps another $60k/year (alternatively, ~$100k/year for a mortgage). All other basic needs are a rounding error compared to that, even with a family.
I earn comparable salary. I paid ~20k in taxes last year. There is a ton you can deduct. And the tax rate is progressive.
Correct me if I'm wrong, but the biggest CA income tax deduction available to most people is the mortgage interest and property tax deductions. So yes, you can deduct a lot of your state taxes - provided you're spending even more on an expensive home.
And yes, the tax rate is progressive, but the average rate is still around 9% at that income level (~36k). Marginal rate is just over 11%.
My overall point is just that almost all of the cost of living delta in CA is from taxes and housing. Didn't mean to get too deep into the numbers.
And yes, the tax rate is progressive, but the average rate is still around 9% at that income level (~36k). Marginal rate is just over 11%.
My overall point is just that almost all of the cost of living delta in CA is from taxes and housing. Didn't mean to get too deep into the numbers.
Wait, you only pay 40k tax on 400k? Or how much other taxes on salary are there in the US?
He's just talking about California State Taxes, not Federal Income Tax.
That’s just state tax (CA being one of the highest). They’ll have to pay the same
federal rates as everyone else on top of that. I assume the reason for excluding it is that’d stay constant no matter where you live in the US.
So how high would this be?
Bad math, 110k in federal taxes and 15k in FICA (social security, Medicare, Medicaid).
https://smartasset.com/taxes/income-taxes
https://smartasset.com/taxes/income-taxes
Probably between city, state, and federal just under 50% total.
It took me a second to realize you just meant California State taxes....
Lived in Dallas and College Station for far longer than I'd prefer, and I can contrast to NYC - taxes and rent is incomparably different. Everything else just depends on your lifestyle choices. You can buy groceries in Dean and Deluca and your coffee in La Colombe, or you can shop in a dollar store and get a coffee for a buck from a stall. I've never scored a coffee for a dollar in Texas even in the shadiest of gas stations. The breadth of options in NYC is insane, especially when you realize that while gas prices are more in Texas, you don't pay for gas at all in NYC! Of course if you're in the burbs that changes, but it's still arguable that you can live fairly modestly in NYC especially if you're single.
> I've never scored a coffee for a dollar in Texas even in the shadiest of gas stations.
Whole Foods drip coffee is $1 for prime members in many locations and is drinkable if not great.
Whole Foods drip coffee is $1 for prime members in many locations and is drinkable if not great.
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All excellent points I make myself but let’s say you move out of SF and no longer pay $3000/mo in rent but now pay half that $1500/mo. You’re now saving $18,000 a year which is cool but almost al your other expenses stay the same (car, Xbox, TV, Internet, insurance, etc). You’re going to lose more than $18,000/yr in TC in the near term and long term (after you leave stripe) you sure and he’ll are.
So the moral of my story is don’t move out of a high cost city for the money, it doesn’t add up. Move out for a myriad of other reasons that may be meaningful for you (family, life, etc)
So the moral of my story is don’t move out of a high cost city for the money, it doesn’t add up. Move out for a myriad of other reasons that may be meaningful for you (family, life, etc)
Depends on your needs.
My wife and I both work remotely now. We need a 3BR place to stay sane because we need two offices. Compared to the south bay, we are saving >3000/m in rent. At a high compensation, marginal tax rates in CA approach 50%. So that 36000 saved is worth 72000 in TC difference.
It gets more dramatic if you pay for childcare. Childcare in the bay area can easily run 20000 more than it might cost in a lower cost of living area. A family of four that has two kids in day care might save 60000 just off rent and childcare differences.
On the other hand, for single people who would have a 1BR wherever they chose to live, the rent difference may only be 20000 and the rest of expenses don't change much and then suddenly dropping 20% on your 200,000 TC ends up being a bad deal.
My wife and I both work remotely now. We need a 3BR place to stay sane because we need two offices. Compared to the south bay, we are saving >3000/m in rent. At a high compensation, marginal tax rates in CA approach 50%. So that 36000 saved is worth 72000 in TC difference.
It gets more dramatic if you pay for childcare. Childcare in the bay area can easily run 20000 more than it might cost in a lower cost of living area. A family of four that has two kids in day care might save 60000 just off rent and childcare differences.
On the other hand, for single people who would have a 1BR wherever they chose to live, the rent difference may only be 20000 and the rest of expenses don't change much and then suddenly dropping 20% on your 200,000 TC ends up being a bad deal.
This isn't really true. Everything in the Bay Area is more expensive. A quick Numbeo search, I found that housing in SF is a little more than 2x as expensive as in Austin, so somewhere around the same ratio. Consumer prices, excluding rent, are 43% higher in SF than Austin.
Even your chain restaurants are more pricey. Everyone has to pay rent, ya know?
Even your chain restaurants are more pricey. Everyone has to pay rent, ya know?
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So in what I wrote above, there are two chunks of money I'm saying you could throw in the CIM: the money you'll make by staying at FAANGs instead of playing startup lottery, and the money you'll save by living somewhere cheaper.
The conventional wisdom (again) is to stay at FAANG and stay in the SFBA. You can also leave SFBA and work at smaller companies that don't offer FAANG comp, and it can still make sense because of the latter chunk of money (lower costs from housing and general CoL).
The conventional wisdom (again) is to stay at FAANG and stay in the SFBA. You can also leave SFBA and work at smaller companies that don't offer FAANG comp, and it can still make sense because of the latter chunk of money (lower costs from housing and general CoL).
Also the one time 200-400k down payment on a house.
For some people the housing costs are even more significant. My target house is 6+ acres within 15 minutes of work. I currently have that in our two income family, and it would make moving very hard. Not only are nominal costs significantly higher in these desirable locations, but the quality is also significantly different.
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> you could be plowing all your housing savings into the compound interest machine.
What specifically do you mean by “compound interest machine”?
What specifically do you mean by “compound interest machine”?
A brokerage account that reinvests dividends with index funds.
Because as we all know, markets never go down.
How much would you have made if you'd invested in a FTSE index fund in 1990 till 2020?
Very little, as it happens. The reason everyone says index funds are great is because the US markets have done well historically. This is not a guarantee.
How much would you have made if you'd invested in a FTSE index fund in 1990 till 2020?
Very little, as it happens. The reason everyone says index funds are great is because the US markets have done well historically. This is not a guarantee.
> markets never go down.
And of course market never recover.
you don't invest in just one region. You invest across the entire world, in all regions. You buy the entire market at market cap weights. This has been shown to have a positive expected return, going back over 100 yrs.
And of course market never recover.
you don't invest in just one region. You invest across the entire world, in all regions. You buy the entire market at market cap weights. This has been shown to have a positive expected return, going back over 100 yrs.
Do you really expect the last 100 years to be predictive of the next 100 years?
> Do you really expect the last 100 years to be predictive of the next 100 years?
it's the best you can do. As the saying goes, past performance doesn't indicate future performance. However, it's the best guess you can make.
it's the best you can do. As the saying goes, past performance doesn't indicate future performance. However, it's the best guess you can make.
No, it’s clearly not. You can also understand how the fundamentals have changed and reason about what is going to happen.
> fundamentals have changed and reason about what is going to happen.
and has this been more correct than using historical data?
And the fundamentals and valuations are subjective - people value different aspects of a company differently. Who's to say your valuation is correct? This is the reason behind volatility.
But if you're buying a broad market cap-weighted index, the behaviour of the price is less affected by individual valuations and more affected by macro-economic factors. And historically, a broad market cap-weighted index has had positive returns. This cannot be said about individual companie's performance.
and has this been more correct than using historical data?
And the fundamentals and valuations are subjective - people value different aspects of a company differently. Who's to say your valuation is correct? This is the reason behind volatility.
But if you're buying a broad market cap-weighted index, the behaviour of the price is less affected by individual valuations and more affected by macro-economic factors. And historically, a broad market cap-weighted index has had positive returns. This cannot be said about individual companie's performance.
Better put it all in your mattress then. Or crypto.
People have been saying "the markets are fundamentally changed and investing is dumb" for ages. Japan has been the single example people point to over and over and over. Meanwhile, other people are looking at 400% returns over several decades.
People have been saying "the markets are fundamentally changed and investing is dumb" for ages. Japan has been the single example people point to over and over and over. Meanwhile, other people are looking at 400% returns over several decades.
Well I don't.
Also, at current interest rates, you'd need to save 65% of pre-tax income to have a good pension, so the likelihood of any of us having a decent pension is very, very low (modulo getting in early at a megacorp).
Also, at current interest rates, you'd need to save 65% of pre-tax income to have a good pension, so the likelihood of any of us having a decent pension is very, very low (modulo getting in early at a megacorp).
True, but the dividend, even reduced, buys you more stock when the market is down. Stocks generally have done well long term.
This is actually only true for the US, other mature markets (such as the UK) have not shown this pattern (look at FTSE 100 returns if you don't believe me). Additionally, sixty years ago, the UK markets were the largest in the world, and I suspect that an indexing strategy would have done well during the height of the British Empire.
I honestly am not sure where to look for dividend reinvestment for ftse 100 returns, so I guess I'll take your word for it, but I know that the european and london exchanges haven't done as well as the US.
What metric are you using to say largest in 1960 though? Not disagreeing, just curious.
What metric are you using to say largest in 1960 though? Not disagreeing, just curious.
1960 was just something I pulled out of my ass, to be honest. I think what I was getting at was that the markets for the dominant power tend to provide above inflation returns, which for the UK is probably pre WW2, to be honest.
> I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area.
I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. I've had friends I met at Google Mountain View move to Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle, etc, usually to be close to family when they're having kids. You do get CoL-adjusted but 90% of SV salary is pretty typical. Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers).
> If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)
That's the case for most people who have worked for ~5-10 years at a Silicon Valley company. When 2009 hit I had a bunch of coworkers who joked about buying up whole city blocks in Detroit and plopping down a Google office and an intentional-living commune there. A lot of mid-career engineers at a FAANG could buy a house for cash in most parts of the U.S. and then have enough left over to retire, but choose not to because at that point they've put down roots in the Bay Area (and gotten addicted to the weather and culture).
I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. I've had friends I met at Google Mountain View move to Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle, etc, usually to be close to family when they're having kids. You do get CoL-adjusted but 90% of SV salary is pretty typical. Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers).
> If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)
That's the case for most people who have worked for ~5-10 years at a Silicon Valley company. When 2009 hit I had a bunch of coworkers who joked about buying up whole city blocks in Detroit and plopping down a Google office and an intentional-living commune there. A lot of mid-career engineers at a FAANG could buy a house for cash in most parts of the U.S. and then have enough left over to retire, but choose not to because at that point they've put down roots in the Bay Area (and gotten addicted to the weather and culture).
> I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. ... Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers).
Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1. On the other hand, I have met several people who started on-site but switched to working remotely later. I'm not saying it's not possible to do the former, but it seems like it's way easier to work remotely for a FAANG if you've already proven yourself, which obviously doesn't work if you have already moved to a lower CoL area and are looking for work.
Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1. On the other hand, I have met several people who started on-site but switched to working remotely later. I'm not saying it's not possible to do the former, but it seems like it's way easier to work remotely for a FAANG if you've already proven yourself, which obviously doesn't work if you have already moved to a lower CoL area and are looking for work.
> Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1.
The cities the parent comment mentioned (Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle) are all cities where Google has offices. So, the folks they mention weren't working remotely, but rather working locally in remote offices.
Source: Google San Diego employee
The cities the parent comment mentioned (Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle) are all cities where Google has offices. So, the folks they mention weren't working remotely, but rather working locally in remote offices.
Source: Google San Diego employee
Many of them actually are working remotely, but have the option to go into the local office if they need anything. Sometimes they also started going into the office a few days a week and then stopped because there's really no point when the team they're working with is remote. (This is before COVID - now everybody is in this situation, and it's likely the whole company will once we come out of COVID. Most of the moves in question were either from my first time at Google [2009-2014] or the period when I wasn't working for them [2014-2020].)
Source: know the people mentioned.
Source: know the people mentioned.
I think it's very rare, I've worked at Google for 8 years and I've met maybe 1 person who works from home on a somewhat regular basis.
Observer bias arguably. If they are working from home, rather hard to meet them.
Also varies a lot by PA. Chrome is very friendly to remote work, because they're an open-source project with a lot of non-Google contributors anyway. Android or Search, not so much. Research, infrastructure, geo, and core - decent. Don't know too much about the other PAs.
A lot of the people I mentioned above actually transferred PAs to make remote work work. If that's a goal of yours, Google's a big enough company that there's probably a role available.
A lot of the people I mentioned above actually transferred PAs to make remote work work. If that's a goal of yours, Google's a big enough company that there's probably a role available.
How? You'd still have meetings with them.
The problem is that you need a VP exception for remote work and many VPs don't believe in it at all. So there are entire orgs where the number of remote people is zero.
The problem is that you need a VP exception for remote work and many VPs don't believe in it at all. So there are entire orgs where the number of remote people is zero.
I was making a broader comment in case someone took that to mean that they can get a remote job working for Google or a similar company without previous experience there, which seems very unlikely.
Yes. 100% remote new hires are extremely rare at FAANGs, and usually reserved for people who are industry superstars (eg. Lars Bak). Going 100% remote after being a valued contributor for 2-4 years beforehand is open to many ordinary employees.
So many comments in this thread assume that people live in SF/NY purely for the money and access to jobs. I think people are missing the point that people actual like living in these places too and are willing to pay a premium it.
I live in New York and like living here. I understand the cost of living here is high, but I also know that there are few places that can offer the lifestyle New York can. Given the option to keep most of my salary and relocate to a lower cost of living city, I think I’d stay in New York.
I live in New York and like living here. I understand the cost of living here is high, but I also know that there are few places that can offer the lifestyle New York can. Given the option to keep most of my salary and relocate to a lower cost of living city, I think I’d stay in New York.
> and if you move to a state with no income tax, you might not even lose almost any net income.
If you relocate from NY to a no tax state, but are still basically working for the NY office, you might be taxed as a telecommuter in NY and still need to pay NY income tax.
I'm not sure how this works for a multi-state company like Stripe, but I've had to do this when I transitioned to working remotely for a NY based startup.
If you relocate from NY to a no tax state, but are still basically working for the NY office, you might be taxed as a telecommuter in NY and still need to pay NY income tax.
I'm not sure how this works for a multi-state company like Stripe, but I've had to do this when I transitioned to working remotely for a NY based startup.
A lot of people are leaving California anyways, and economies in other states are booming, so jumping on that ship with good compensation, even for the short term, is a win-win for anyone who is looking to get out while the getting is good. I know someone who moved _to_ California from another state a few years ago and got the truck virtually for free because the truck company had so many more people going in the opposite direction. But then they paid very high prices for the truck when they left.
> A lot of people are leaving California anyways
Yeah, but the out-migration is largely at the low-end of the economic scale; with net in-migration at the high end.
Yeah, but the out-migration is largely at the low-end of the economic scale; with net in-migration at the high end.
This was true in the past but this year with covid and the fires it’s likely the high end will see a big out-migration as well... https://www.theguardian.com/us-news/2020/sep/12/san-francisc...
That article neither says nor supports your “it’s likely that” conclusion (which is about San Francisco not CA as a whole, and is almost entirely speculative back and forth between different advocacy group spokespeople.)
Ben Shapiro, Elon Musk, and Joe Rogan all are on the high end, and all have headed out. I also headed out, but I am only on the high end in terms of total world population, but they are real high enders fleeing the myriad of issues coming to a head in good ole CA in 2020.
> Your savings will be short term gained and you will lose all your friendships locally.
Haha not exactly preaching to the choir here. We all are aware of what sacrifices we make and don't change course for those things.
Its always "lets see what it's like over here, oh cool mountains! oh cool, beaches, oh cool new IPAs" or whatever. Try not to get completely isolated with age and figure it out!
Haha not exactly preaching to the choir here. We all are aware of what sacrifices we make and don't change course for those things.
Its always "lets see what it's like over here, oh cool mountains! oh cool, beaches, oh cool new IPAs" or whatever. Try not to get completely isolated with age and figure it out!
Yeah housing is cheaper in other areas. But everything else costs the same. An iPhone or a Honda Civic costs the same everywhere in the US.
Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place.
Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.
Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place.
Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.
No, not "everything else". Restaurants/coffee shops/clubbing may be cheaper too, children daycare too, even some groceries. And taxes, as already pointed out.
Just an example calculation: If you can save $1000/month on rent and another say $150/month on other living expenses. that's $13800 annually. That's about $138000 annually net salary right now ($124200 after the cut) to break even, or about $180K-$210K pre taxes and pre cut, living in San Fran. Now, if you move to an area with lower taxes that break even point will only go up.
Just an example calculation: If you can save $1000/month on rent and another say $150/month on other living expenses. that's $13800 annually. That's about $138000 annually net salary right now ($124200 after the cut) to break even, or about $180K-$210K pre taxes and pre cut, living in San Fran. Now, if you move to an area with lower taxes that break even point will only go up.
And don't forget car insurance on that Honda Civic. That is not the same everywhere in the US.
Sure, but you generally don't buy a new iPhone or Honda Civic every month, while your mortgage/rent is due every month again.
Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well.
Everything is more expensive in a major city because everyone has more expenses and passes those on.
Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well.
Everything is more expensive in a major city because everyone has more expenses and passes those on.
Sales taxes generally go up in states with low income taxes fwiw.
A lot of the high tax states have high taxes in multiple categories. Moving to a high sales tax, low income tax state might actually "reduce* your sales tax.
NYC, where I live, has an 8.875% combined sales tax. And a high income tax.
Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes.
Moving to Texas would cut the sales tax I pay.
NYC, where I live, has an 8.875% combined sales tax. And a high income tax.
Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes.
Moving to Texas would cut the sales tax I pay.
People finance their cars, and increasingly even their phones these days. You DO make monthly payments on your car (and sometimes your phone)
You have to consider the trajectory. SF is already a dumpster fire, if enough affluent people leave, property prices will tank and you will be paying off a mortgage for a larger sum than what the property is worth.
Meanwhile, all these affluent people have to move somewhere, the properties in these places aren't going to stay cheap forever. So you can get a cheaper mortgage in those places to pay off a property that will rise in value.
Of course, that's all speculation. Prices in the "good places" are already high anyway, if you really want to strike a bargain you have to buy into the places that are still up-and-coming.
Meanwhile, all these affluent people have to move somewhere, the properties in these places aren't going to stay cheap forever. So you can get a cheaper mortgage in those places to pay off a property that will rise in value.
Of course, that's all speculation. Prices in the "good places" are already high anyway, if you really want to strike a bargain you have to buy into the places that are still up-and-coming.
Have you seen SFH homes prices in SF and larger Bay Area prices ? It is through the roof even in pandemic. Don't believe some random media quotes
The stock market hit all time highs during the pandemic while the economy is in shambles. Why? Because there's a lot of cheap money chasing those assets, and it's going to stay that way for a long while. Therefore, those house prices may still nominally rise or at least stay stable, even while they're losing value.
You have to look at it in terms of opportunity cost. What else could you have bought for that money? If prices rise in SF only because of inflation, prices rise even faster in those places where there's a real increase in demand.
You have to look at it in terms of opportunity cost. What else could you have bought for that money? If prices rise in SF only because of inflation, prices rise even faster in those places where there's a real increase in demand.
> SF is already a dumpster fire,
I didn't notice this when I went there last year, is it a post-covid thing? What happened?
I didn't notice this when I went there last year, is it a post-covid thing? What happened?
They must've given you the Potemkin village tour.
I did see some homeless people, but overall it still felt like a nice place. Of course I avoided the tenderloin and other dodgy areas (and this time I didn't use the BART, unlike previous times).
> if enough affluent people leave, property prices will tank and you will be paying off a mortgage for a larger sum than what the property is worth.
Or, as California is a non-recourse state, leaving the bank holding the bag, paying only taxes on the unpaid debt.
> Meanwhile, all these affluent people have to move somewhere
Well, they actually don't have to move, and if they do it may not be to where you predict.
Or, as California is a non-recourse state, leaving the bank holding the bag, paying only taxes on the unpaid debt.
> Meanwhile, all these affluent people have to move somewhere
Well, they actually don't have to move, and if they do it may not be to where you predict.
The cost of housing absolutely impacts local prices across the board for basic reoccurring costs like food, fuel, childcare, taxes, etc. This is different and arguably more of an impact on budgets than one-time costs like a car where you can (and people often do) travel to make the purchase if you are able to save money.
I was paying $70-80 to fill my tank of gas in CA, and now am paying $35 in SC. I took my son for sushi the other night, and we feasted and I had two glasses of wine, and the bill was $50 instead of at least $100 in LA, so yea, everything is way cheaper when you aren't paying to live in the "dream" world of LA.
> As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back.
And on top of that, they may have to accept a non-compete clause in their employment contract.
All in all, they have a pretty strong incentive to remain a Stripe employee as long as possible. Stripe probably likes this.
And on top of that, they may have to accept a non-compete clause in their employment contract.
All in all, they have a pretty strong incentive to remain a Stripe employee as long as possible. Stripe probably likes this.
There is a good chance state income tax will become deductible again after the election and it won't be quite such a savings.
I think people misunderstand the SV salary situation. If you are a mid to senior level, you are pulling $400k annually, with daily pings from recruiters at Facebook, Google, Netflix, Airbnb, Instacart, Uber, Twitter etc., cost of living is the least of your concerns.
> a state with no income tax
Please excuse a non-american asking a question, but doesn't this mean that no money gets paid into retirements as well? Or is that a federal tax?
Please excuse a non-american asking a question, but doesn't this mean that no money gets paid into retirements as well? Or is that a federal tax?
There's a 6.2% federal tax for a government-backed pension (social security) that may or may not be around by the time people need it. Most Americans are responsible for their own retirement funding, usually via an employer sponsored plan (401k and others)
Either way, it has nothing to do with a state-level income tax.
Either way, it has nothing to do with a state-level income tax.
whats federal income tax on 400k? Any other Federal taxes on top of income tax and socials
72-111k depending on marital status, house mortgage, and retirement savings. Typically 100k.
There’s also ~15k for FICA: Social Security (small 65+ pension) and Medicare (65+ healthcare)[0]
Any other federal taxes to the individual are insignificant or investment related.
[0] https://smartasset.com/taxes/california-tax-calculator#pfVHM...
Any other federal taxes to the individual are insignificant or investment related.
[0] https://smartasset.com/taxes/california-tax-calculator#pfVHM...
sibling comment answered your question, but I'll turn it around and ask, how is it elsewhere? Are retirement contributions compulsory?
Outside of the US? In developed economies, you usually have a mandatory retirement "tax" that goes into the public scheme and which pays a minimum amount when you are old enough (65 or 70 usually). It isn't much on its own, maybe enough to clear the poverty line or get close to it so you're also expected to invest for yourself through tax advantaged accounts. Better employers also offer a pension plan for which you pay some and they match it.
Details really depend on jurisdiction.
Eg Australia and Singapore have mandatory retirement funds. In eg Germany, the money you pay for the government retirement scheme, just gets paid out straight to current retirees, ie no savings are made at all.
Eg Australia and Singapore have mandatory retirement funds. In eg Germany, the money you pay for the government retirement scheme, just gets paid out straight to current retirees, ie no savings are made at all.
> just gets paid out straight to current retirees
Well, considering most state pension schemes are also Ponzi schemes this isn't the case in only Germany. Norway might have an actually sustainable pension scheme?
Well, considering most state pension schemes are also Ponzi schemes this isn't the case in only Germany. Norway might have an actually sustainable pension scheme?
Well, Australian 'superannutation' has private funds. Similar-ish to American 401k.
The Singaporean CPF system is interesting, but perhaps similar to the Norwegian system?
The Singaporean CPF system is interesting, but perhaps similar to the Norwegian system?
UK: it's basically compulsory to pay "national insurance" contributions if you're earning enough. That gives you a (fairly small) state pension: https://www.gov.uk/new-state-pension
On top of that it's strongly encouraged to make private pension contributions, from pre-tax income; I think this corresponds to the US "401k"?
On top of that it's strongly encouraged to make private pension contributions, from pre-tax income; I think this corresponds to the US "401k"?
UK private pensions are similar but much more generous in tax relief (for now) and in the amount you can put into them -even more so if you do salary sacrifice.
There is also a lot more tax advantaged savings for the better off i.e. 20k pa ISA basically put 20k a year beyond the reach of income and CGT is just the start.
VCT's EIS and SIS for some one on a SV engineers wage for example.
Tax on share options is far more sane as well.
There is also a lot more tax advantaged savings for the better off i.e. 20k pa ISA basically put 20k a year beyond the reach of income and CGT is just the start.
VCT's EIS and SIS for some one on a SV engineers wage for example.
Tax on share options is far more sane as well.
About 18% of your income (including social security payments if you are unemployed) are compulsory and set of for your retirement, on top of that many employers may make a tax-deductible 4% payment into the employees private retirement fund.
They could probably buy a house now, in the right location.
What the fuck is a TC man
Edit: Total Compensation on an annualized, repeatable basis. Usually used in the context of compensation packages in the software industry with companies such as Google and Facebook.
Thanks https://www.urbandictionary.com/define.php?term=tc
Motherfuck
Edit: Total Compensation on an annualized, repeatable basis. Usually used in the context of compensation packages in the software industry with companies such as Google and Facebook.
Thanks https://www.urbandictionary.com/define.php?term=tc
Motherfuck
Total compensation?
Total Compensation I figured out.
When people spend too much time on Blind they don't realize this term isn't something everyone knows :)
I'm not sure what the average poster here on HN makes, but if I assume that it's ~$250K for the employees living in SF, you could move to St. Louis, MO, have your salary adjusted to $225K, get a $20K bonus for moving, and your 225,000 St. Louis dollars would be equivalent to 513,369 San Francisco dollars.
I get that a 10% annual salary hit is larger than $20K for a lot of people, but the cost of living in these areas is over 100% larger than most other cities in the country. I would take that deal in a heartbeat.
I get that a 10% annual salary hit is larger than $20K for a lot of people, but the cost of living in these areas is over 100% larger than most other cities in the country. I would take that deal in a heartbeat.
I think this really depends on your lifestyle.
I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems.
If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary.
I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis.
That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise.
Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power.
For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world.
Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.
I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems.
If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary.
I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis.
That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise.
Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power.
For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world.
Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.
Don’t forget owning a house the “cost” is mortgage INTEREST, property tax, and insurance premiums for owning.
With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad.
I did the math and owning is cheaper than renting in just a few years.
With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad.
I did the math and owning is cheaper than renting in just a few years.
>...and California home insurance stupidly low (50$/month for 1+ million house).
This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.
This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.
Because California houses aren't worth any more than Iowa houses, and you don't really need to insure land very much. All the value is the land.
And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.
And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.
Earthquake damage isn’t covered.
And California has relatively dry mild weather.
And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+.
Chance of needing a rebuild are very, very, low.
And California has relatively dry mild weather.
And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+.
Chance of needing a rebuild are very, very, low.
Even without mortgage interest, owning a house outright has an opportunity cost. Since you could use that capital elsewhere instead.
People perceive a lower probability of advancement in other regions, and lower probability of securing similar employment in the event of turbulence at your employer. It's a personal decision how much value to assign to these possibilities, but obviously it's significant enough to sufficient people that Stripe is having to offer extra incentive to move.
Although the above is not the only factor. Obviously there are things like weather, geographic amenities, politics, etc to consider.
Although the above is not the only factor. Obviously there are things like weather, geographic amenities, politics, etc to consider.
I know I'm weird, but I care about how much I get paid because that's how I keep score. It's how I know my employer respects me. It's almost immaterial to me that I actually receive or use that money.
So, I know this is stupid, but moving, getting 20k, and taking a 10% salary hit would piss me off, even if I essentially became "richer."
So, I know this is stupid, but moving, getting 20k, and taking a 10% salary hit would piss me off, even if I essentially became "richer."
Just an FYI, this person has opened up and expressed a genuine opinion, and has not violated any rules. Please don't downvote people for this, otherwise you might not get this sort of insight.
It’s not weird at all. Your engagement with your employer is about how they value your labor output and how you value your time. That’s it. Unless a job has a clear business reason for being tied to a geographic location or externality, there is zero legitimate basis for an employer to factor your location in. If they are saying the market rate suddenly changed and they can hire a cheaper person from somewhere else, then thank them for the opportunity, wish them luck and hand in your resignation letter. You’ve already been delivering value in a way that makes them happy to pay your total comp. Merely switching geography has changed no part of that (unless they are saying they want to replace you, in which case, good luck to them).
>I know I'm weird, but ... that's how I keep score.
That's not so weird - many CEOs work that way.
That's not so weird - many CEOs work that way.
Most of that income difference is tied up in the costs to buy a home. I find the arguments on this topic to be fairly silly.
If I moved from NYC to St Louis I could take my rent payment and go buy a house. I’ve upgraded but my housing expenses are the same. Then if I wanted to move back to NYC I would need to double or triple my income to purchase something relatively equivalent. Or I could just move back into my old apartment.
The actual costs on the ground for most people are going to be way more similar than these COLA calculators will show. People won’t live their exact same lives with the exact same luxuries.
The biggest actual difference is taxes.
However, the big downside and risk here is that you’ll be living in St Louis with an SF salary. You will not find a similar salary in St Louis. If you want to quit your job and maintain your standard of living you’re left with some tough choices.
If I moved from NYC to St Louis I could take my rent payment and go buy a house. I’ve upgraded but my housing expenses are the same. Then if I wanted to move back to NYC I would need to double or triple my income to purchase something relatively equivalent. Or I could just move back into my old apartment.
The actual costs on the ground for most people are going to be way more similar than these COLA calculators will show. People won’t live their exact same lives with the exact same luxuries.
The biggest actual difference is taxes.
However, the big downside and risk here is that you’ll be living in St Louis with an SF salary. You will not find a similar salary in St Louis. If you want to quit your job and maintain your standard of living you’re left with some tough choices.
Not just that, CA has 11% state tax. If you move a state with lesser state tax you will save on top of that. Most people are moving to Nevada which has no state tax. This could be huge saving.
Honestly I wish stripe would give people like myself who live in St. louis a chance to work for them -- i've applied twice and couldn't get an interview despite being (I think?) qualified.
I love living here, don't want to move to SF... I think with more remote work we will see companies leveraging talent in places like St. Louis. Probably easier than paying someone to leave.
I love living here, don't want to move to SF... I think with more remote work we will see companies leveraging talent in places like St. Louis. Probably easier than paying someone to leave.
i’m pretty sure $250k in SF becomes closer to $80k in St. Louis according to https://www.bestplaces.net/cost-of-living/san-francisco-ca/s...
you're only accounting for salary here. there are a lot of non immediate and non monetary benefits that naturally arise that come out of living in a tech hub and you are advising people to value that at zero.
I'll believe it's zero the day the Collisons themselves leave SF.
I'll believe it's zero the day the Collisons themselves leave SF.
Those SF salary numbers are always so insane, from the point of view of someone in Europe. I never know how to process them.
> 225,000 St. Louis dollars would be equivalent to 513,369 San Francisco dollars.
Does that include your car, tech gadgets and vacation dollars?
Does that include your car, tech gadgets and vacation dollars?
Yeah, but happens when the said person is laid off. Are there other companies in St Louis that will match that pay ?
I hope the tech workers leaving California take into account how hostile most states are in terms of non competes for employees. Not having them enforceable here is a big part of the magic that let the tech industry thrive in the Bay Area.
That said, I’m happy to tough it out here and potentially take advantage of not having to compete with as many other techies and private school kids for rentals in my neighborhood in SF.
That said, I’m happy to tough it out here and potentially take advantage of not having to compete with as many other techies and private school kids for rentals in my neighborhood in SF.
How does it work in America? If one works remotely for a company based in SF from NV for example, do the employment laws of NV apply? If time is spilt between states how would it be determined? Would this only matter in the event of a dispute between the two parties?
It's based on your primary residence location. "Primary" typically meaning where you reside more than half the year.
In your example, it would be Nevada.
In your example, it would be Nevada.
This is a really good point. Will these companies make their employees sign non-competes during their move?
Most of the employment agreements I’ve signed with largish tech companies have the non-compete baked in there with language that it does not apply where not enforceable or a specific carve out for California. I know Amazon makes people sign one again when you on board in a new location after a transfer. (There was an article about that recently I think)
I don't know how Stripe's offices are arranged (what sort of work is done where), but it seems strange to me that the bonus to relocate is a fixed amount but the adjustment to salary is a percentage.
I've got to think well-paid software folks are going to look at the $20k and scoff. I know I'd be underwater on that deal in less than a year.
On the other hand, administrative folks, HR, etc ... they might see it as a more appealing deal.
I wonder if there's some sort of ulterior motive here for Stripe?
I've got to think well-paid software folks are going to look at the $20k and scoff. I know I'd be underwater on that deal in less than a year.
On the other hand, administrative folks, HR, etc ... they might see it as a more appealing deal.
I wonder if there's some sort of ulterior motive here for Stripe?
The $20k covers relocation costs. Whether or not you'd be 'underwater' depends on cost of living in your new location. San Fran and New York are very expensive.
> The $20k covers relocation costs
I didn't read the article and thought it was a bonus. If it's relocation costs, that's an even worse offer than it sounds. The company will probably save that much money in the first 2 months of the employee leaving NYC and the Bay Area.
EDIT: I didn't know about the 10% pay cut. That's what I get for not reading the article.
I didn't read the article and thought it was a bonus. If it's relocation costs, that's an even worse offer than it sounds. The company will probably save that much money in the first 2 months of the employee leaving NYC and the Bay Area.
EDIT: I didn't know about the 10% pay cut. That's what I get for not reading the article.
Saving $20K in 2 months would be an annualized $120K/year. A 10% pay cut might represent a savings of $25K - $50K/yr. Where's the rest of the savings to the company coming from?
That's 10% off your current salary. They never say anything about what future raises will look like.
It might be possible that you start off at 10% less, but the people in the Bay end up getting higher raises than you do and eventually you lose a lot more than just 10%.
It might be possible that you start off at 10% less, but the people in the Bay end up getting higher raises than you do and eventually you lose a lot more than just 10%.
Of course. My comment was to share some math around the claim that the company would save the $20K in the first two months, nothing about the long-term.
I didn't know about the 10% pay cut and assumed salaries would be adjusted to the local market. You're right.
However, if the employees move to smaller markets they presumably have fewer employment options and less bargaining power in the future. So the company will save money over the long term too.
However, if the employees move to smaller markets they presumably have fewer employment options and less bargaining power in the future. So the company will save money over the long term too.
If it's indeed just a 10% cut, you're likely going to be coming out ahead wherever you move, at least in the short term.
In the longer term, it depends on raises. Historically a big cost to moving to work remote in a low cost of living area is receiving much stingier raises indefinitely. I suspect that will continue to be true, though who knows.
In the longer term, it depends on raises. Historically a big cost to moving to work remote in a low cost of living area is receiving much stingier raises indefinitely. I suspect that will continue to be true, though who knows.
Yea, CA income taxes are in the range of 10%, right? Move to a state without income taxes and you’ve already avoided taking a net salary reduction.
Nobody ever stops to ask "why does this state have no income taxes"?
And the answer is almost always that if they had an income tax nobody would want to live there.
And the answer is almost always that if they had an income tax nobody would want to live there.
As someone who has lived on the east coast, west coast, Sweden, and Germany...I've gotta say I disagree. The best overall quality of life I've experienced has been in Nevada. My money goes farther, the people are less of an obstacle (NIMBY, zoning, traffic, homeless issues, etc), politics is basically a non-factor, and the commute times are measured in minutes instead of hours.
>The best overall quality of life I've experienced has been in Nevada.
As someone who lived on the East Coast, the Midwest, and Nevada, I'm surprised by this. Could you elaborate further?
As someone who lived on the East Coast, the Midwest, and Nevada, I'm surprised by this. Could you elaborate further?
It's hard to really elaborate because everything is a package deal. California is silly expensive, but comes with a lot of social problems. New York is the same to a large degree. The midwest is cheap, but opportunity is more scarce. Most places in Europe just don't pay well, charge way too much tax, and then don't provide nearly the quality of social service many Americans believe they do.
Nevada is the middle ground of a lot of these places. You have mountains if you like snow, you don't have to deal with snow (ever) if you don't want to. You have pretty good infrastructure if you want to work remotely, you can fly to LA in 45 minutes if you have to for work. (I'm convinced there are instances where it's faster to commute from Las Vegas to LA than from...outside of LA to LA). Typical commute time in Las Vegas is probably on the order of 15-20 minutes. Under normal traffic conditions you can make it from one end of the city to the other in 45 minutes or less.
Socially, there's less politics here in general. Less of the NIMBY folks pushing for poor policy and zoning. Less protesting/rioting/looting. If I had to guess, the average person here owns a firearm, but nobody ever really seems to notice or care. Crime is comparable to California overall but there's more places in LA that I would put on my "never go to" list than in Vegas. And, while we definitely have homelessness, it's substantially less than when I was recently in LA.
With all of that having been said I think the most important thing is cost. My fiance, at 22 (and with no college degree) makes 17/hr doing admin work for a local construction company. She just bought her own house and is living comfortably. She did that without any financial assistance from me, or her parents, because it wasn't necessary. Her mortgage is under 1k/m for 1800(ish?) square feet of a reasonably modern house.
Nevada is the middle ground of a lot of these places. You have mountains if you like snow, you don't have to deal with snow (ever) if you don't want to. You have pretty good infrastructure if you want to work remotely, you can fly to LA in 45 minutes if you have to for work. (I'm convinced there are instances where it's faster to commute from Las Vegas to LA than from...outside of LA to LA). Typical commute time in Las Vegas is probably on the order of 15-20 minutes. Under normal traffic conditions you can make it from one end of the city to the other in 45 minutes or less.
Socially, there's less politics here in general. Less of the NIMBY folks pushing for poor policy and zoning. Less protesting/rioting/looting. If I had to guess, the average person here owns a firearm, but nobody ever really seems to notice or care. Crime is comparable to California overall but there's more places in LA that I would put on my "never go to" list than in Vegas. And, while we definitely have homelessness, it's substantially less than when I was recently in LA.
With all of that having been said I think the most important thing is cost. My fiance, at 22 (and with no college degree) makes 17/hr doing admin work for a local construction company. She just bought her own house and is living comfortably. She did that without any financial assistance from me, or her parents, because it wasn't necessary. Her mortgage is under 1k/m for 1800(ish?) square feet of a reasonably modern house.
This is very belated, but thanks for the answer. I only asked because I lived in Nevada only to move back to the Midwest for a job opportunity. I kind of miss it, as it is much more scenic than where I am in the Midwest, but at the same time the jobs are simply not there.
>I think the most important thing is cost
I completely agree, where I live houses aren't exactly cheap, and we have high state property taxes. It gets even worse if you move towards the local college town which has seen a huge bump in housing prices along with additional property taxes added on. It's a shame that western NV doesn't have more UX jobs, but at the same time, remote work may change that.
>I think the most important thing is cost
I completely agree, where I live houses aren't exactly cheap, and we have high state property taxes. It gets even worse if you move towards the local college town which has seen a huge bump in housing prices along with additional property taxes added on. It's a shame that western NV doesn't have more UX jobs, but at the same time, remote work may change that.
That’s a dumb posthoc justification. You’re suggesting nobody would want to live in Washington state if it had income tax yet Oregon has very similar climates and cultures (both in the east and West) with an income tax and people live there.
Oregon also has no sales tax, so real tax burdens between washington and Oregon are extremely similar in practice for most people - same with laws and culture. Norcal, oregon, washington and BC are similar enough culturally that many want them to form their own nation (cascadia)
Florida has no state income tax, but it does have sales taxes that are largely paid by tourists visiting the state.
[deleted]
> San Fran and New York are very expensive.
Maybe before covid. I am not so sure anymore though.
This is anecdotal, but for reference, I am going to save 1k$ a month on rent for my 1 bedroom apartment, when it renews.
Maybe before covid. I am not so sure anymore though.
This is anecdotal, but for reference, I am going to save 1k$ a month on rent for my 1 bedroom apartment, when it renews.
You're saving 1k/month, but out of curiosity, what is the total rent?
In 2016 I lived in adequately nice 2 bedroom, 1.5 bathroom apartment in Ames, IA (home of Iowa State University) for $820/month before splitting with my roommate. Internet, cable, and water were included. The highest end apartments I heard of in town were ~800/month per tenant in 4 bedroom swanky apartments right across the street from the university.
Obviously total comp can more than offset cost of living differences, but the difference in cost continually blow my mind.
In 2016 I lived in adequately nice 2 bedroom, 1.5 bathroom apartment in Ames, IA (home of Iowa State University) for $820/month before splitting with my roommate. Internet, cable, and water were included. The highest end apartments I heard of in town were ~800/month per tenant in 4 bedroom swanky apartments right across the street from the university.
Obviously total comp can more than offset cost of living differences, but the difference in cost continually blow my mind.
Same here. My rent went down by a bit more than $1k when I renewed.
Are tenants moving out? Where are they going? Obviously many will be finding it harder to pay, but that alone surely hasn’t caused this large of a drop?
I’m very remote from this situation so please excuse my ignorance.
I’m very remote from this situation so please excuse my ignorance.
Yes they're moving out. I know for a fact that the complex isn't even posting all of their vacancies as my friend's now-empty unit has never been listed. I don't know how this will play out in the long term but lots of my teammates at work (3/18) have moved out of the Bay Area, at least for the short term.
Many of my friends moved back to their hometown to be near their parents as well. It's much cheaper and probably a once in a lifetime chance to really interact with your parents daily after college.
Many of my friends moved back to their hometown to be near their parents as well. It's much cheaper and probably a once in a lifetime chance to really interact with your parents daily after college.
As someone who still lives in SF right now, it and NYC are still expensive relative to the rest of the country, even if people are getting better deals on rent at the moment.
> I've got to think well-paid software folks are going to look at the $20k and scoff. I know I'd be underwater on that deal in less than a year.
It's a reasonable deal. Just removing the need to drive into SF 4-5 days a week is worth 10% of most people's paycheck. You'd only be underwater in terms of the top-line, once you consider expenses and time lost to commuting, you come out way ahead even without the $20k for relocating.
It's a reasonable deal. Just removing the need to drive into SF 4-5 days a week is worth 10% of most people's paycheck. You'd only be underwater in terms of the top-line, once you consider expenses and time lost to commuting, you come out way ahead even without the $20k for relocating.
the cut is only for salary. the majority of comp at stripe is stock.
so someone making 400k total comp may only make 160k in salary and so the cut would be 16k. (4% of total comp)
But california state income tax is also 10% so it could cancel out.
so someone making 400k total comp may only make 160k in salary and so the cut would be 16k. (4% of total comp)
But california state income tax is also 10% so it could cancel out.
Not only that, would you really want to relocate away from where the jobs and opportunities are for advancement in your field?
This raises the rather provocative question of whether Stripe expects better retention in addition to lower labor costs by pushing talent out to less competitive locales.
Removing geography from the hiring equation is going to fuck American tech workers. Once you’ve gone digital, there’s no (on paper) difference between a programmer in the Philippines or in Iowa except the one in Iowa is much more expensive.
Timezone and language skills my dude. If you are in the same timezone then it becomes much easier.
There are millions of south Asians who’d be happy to work any hour of the day you ask them to.
Your work product will definitely suffer if you are trying to maintain a sleep/wake schedule significantly different from your family and friends. I've seen this happen directly, and it's really bad.
Not to mention what a creepy and unnatural work culture that would be back in the home base location.
“Hey everyone, let me introduce you to the wholesale replacement technology staff we obviously hired just to pay them way unfairly less and fire all your friends who did a good job. It may be night time every time you see them on the video call but don’t worry. As you capitalize on a near indentured servant relationship with them so we can pay them less than their worth purely because of geopolitical arbitrage, they’ve generously agreed to never read their kids bedtime stories or sleep at the same time their spouses do, as they live out a stereotype hellscape of Western arrogance where they are happy to be worker ants endlessly reciting Bill Gates’ “flipping burgers is opportunity” speech in their heads.”
“Hey everyone, let me introduce you to the wholesale replacement technology staff we obviously hired just to pay them way unfairly less and fire all your friends who did a good job. It may be night time every time you see them on the video call but don’t worry. As you capitalize on a near indentured servant relationship with them so we can pay them less than their worth purely because of geopolitical arbitrage, they’ve generously agreed to never read their kids bedtime stories or sleep at the same time their spouses do, as they live out a stereotype hellscape of Western arrogance where they are happy to be worker ants endlessly reciting Bill Gates’ “flipping burgers is opportunity” speech in their heads.”
True, but how many of them are good programmers? The US is just better at producing them than other places.
https://blogs.worldbank.org/education/who-trains-best-comput...
> The United States trains the best computer graduates ― by far: We find that CS seniors in the United States substantially outperform seniors in China, India, and Russia. The average computer science student in the United States ranks higher than about 80 percent of students tested in China, India, and Russia. Seniors in elite institutions in the United States similarly outperform seniors in elite institutions in China, India, and Russia by approximately 0.85 Standard Deviations (SDs). Importantly, the skills advantage of the United States is not because it has a large proportion of high-scoring international students.
https://blogs.worldbank.org/education/who-trains-best-comput...
> The United States trains the best computer graduates ― by far: We find that CS seniors in the United States substantially outperform seniors in China, India, and Russia. The average computer science student in the United States ranks higher than about 80 percent of students tested in China, India, and Russia. Seniors in elite institutions in the United States similarly outperform seniors in elite institutions in China, India, and Russia by approximately 0.85 Standard Deviations (SDs). Importantly, the skills advantage of the United States is not because it has a large proportion of high-scoring international students.
There's some solid programming talent in Vietnam, they constantly amaze me with their skills and will work for a few hundred a week before they get poached by the states.
I've seen kids straight out of highschool who can write solid stuff and know git back to front compared to some lad with an Ivy league bachelor's who is basically clueless, needing his hand held for months and yet demanding 8x the wage.
I treat everyone who only has a degree and no real world skills with a lot of suspicion. There's plenty of ridiculously good hires out there.
I've seen kids straight out of highschool who can write solid stuff and know git back to front compared to some lad with an Ivy league bachelor's who is basically clueless, needing his hand held for months and yet demanding 8x the wage.
I treat everyone who only has a degree and no real world skills with a lot of suspicion. There's plenty of ridiculously good hires out there.
Mostly agreed. A bigger difference might be that American companies do a decent job overall of training their 'apprentice programmers' (that's what fresh grads mostly are).
They basically did a computerized quiz? While I might agree with conclusions I might suspect the methodology.
It's important to highlight that the more significant variable here is probably the quality/prestige of universities within the U.S., which in turn then attracts the best talent and students around the world, rather than the other way around.
> Importantly, the skills advantage of the United States is not because it has a large proportion of high-scoring international students.
I think you may be misunderstanding my point. My comment is meant to highlight the fact that the quality / prestige of universities in the US consequently attract the smartest / most talented students by virtue of being the most highly ranked in the world.
This study looks highly flawed. They gave ets tests to random (categorized) people in the three countries. So far so ok (although the question is always what does the test measure, I mean what e.g. recursion is not big in china, because it is not used in production etc). But for the US the take ets data instead of testing people for this study. So it seems they compare it with people who took this exam for other reasons (and probably studied/prepaeed for this exam!); or maybe I understand this wrongly
The US is the best of these four. There are other countries, too.
I disagree. It's going to be a net positive because it will make the stock market go up (thanks to lower production costs) and will ensure that our investments can maintain their dominant positions which will benefit everyone and will create more jobs.
There are also legal and tax considerations to using a foreign programmer over a local one. Pretty quickly, many companies will discover the pitfalls to outsourcing.
Among the big consequences: you lose R&D tax credits. The language and skill barrier is also pretty big; most companies that outsource end up spending so much money on QC that they barely save anything at all.
It's theoretically possible to find good programmers in the Philippines as opposed to locally. But seeing as how finding local programmers is still not a solved issue, expanding the job pool to include the entire world isn't going to make that task any easier.
Among the big consequences: you lose R&D tax credits. The language and skill barrier is also pretty big; most companies that outsource end up spending so much money on QC that they barely save anything at all.
It's theoretically possible to find good programmers in the Philippines as opposed to locally. But seeing as how finding local programmers is still not a solved issue, expanding the job pool to include the entire world isn't going to make that task any easier.
It’s pretty bold to assume that local devs are that much better. The high paid SV companies might do better than most at attracting talent, but the average developer team in the US is pretty terrible. I’ve worked in many organisations as a contractor, and the number of completely brain dead software engineers who do little more than fill seats and collect checks is astonishing. An average developer from Manila would struggle to do worse.
> But seeing as how finding local programmers is still not a solved issue
They've made it pretty clear that they won't be looking for local programers. They're looking domestically. Presumably, the same processes used to hire remote domestic programmers will be equally applicable for most remote non-domestic workers too.
They've made it pretty clear that they won't be looking for local programers. They're looking domestically. Presumably, the same processes used to hire remote domestic programmers will be equally applicable for most remote non-domestic workers too.
> you lose R&D tax credits
Aren't those negligible compared to the salary gap?
Aren't those negligible compared to the salary gap?
> Pretty quickly, many companies will discover the pitfalls to outsourcing.
Probably true, however by then they will already have made the decision and it will be priced in to the company’s stock. The System is replete with the consequences of bad short-term decisions that have become more or less locked in.
$200k vs $<20k. It’s an extremely large gap to be filled. Surely the people who spend their days looking at numbers on spreadsheets will see this gap and try to take as much advantage of it as they possibly can, and surely the market will reward the massive cuts in operating costs.
Probably true, however by then they will already have made the decision and it will be priced in to the company’s stock. The System is replete with the consequences of bad short-term decisions that have become more or less locked in.
$200k vs $<20k. It’s an extremely large gap to be filled. Surely the people who spend their days looking at numbers on spreadsheets will see this gap and try to take as much advantage of it as they possibly can, and surely the market will reward the massive cuts in operating costs.
They could do outsourcing today, yesterday, and 10 years ago just as well. Nothing changed, structurally or technologically (covid is neither), for outsourcing to work better now than it used to be so far.
There will always be companies who need to learn on their own how $20K developers are different from $200K developers and what investing in either means 10 years down the road.
By the way, good developers with good English and good communication skills can easily earn MUCH more than $20K even today by working remotely. Already today in most countries there are almost no barriers to earning multiples of their national averages other than one's own skills and attitude. And yet dev salaries in America are as high as ever.
The industry seems to be growing faster than the labour force even despite globalization, and I don't think that trend will reverse anytime soon. We're still shoving software into more places, industries, and processes, and making it all more complicated.
There will always be companies who need to learn on their own how $20K developers are different from $200K developers and what investing in either means 10 years down the road.
By the way, good developers with good English and good communication skills can easily earn MUCH more than $20K even today by working remotely. Already today in most countries there are almost no barriers to earning multiples of their national averages other than one's own skills and attitude. And yet dev salaries in America are as high as ever.
The industry seems to be growing faster than the labour force even despite globalization, and I don't think that trend will reverse anytime soon. We're still shoving software into more places, industries, and processes, and making it all more complicated.
You forget about the culture, work culture, mentality and education in those countries. I don't see a reason why should I make less for the same job just because I'm from a different country. What if you are a digital nomad? In the end it should be more about who YOU are, not what country you are from. I see a big difference between people from different countries even if the education level and years of experience seem to be the same. You will see difference in education even between cities.
Knowing that the market is getting even more global it only encourages me to ask for more money, not less.
Knowing that the market is getting even more global it only encourages me to ask for more money, not less.
countries? the gap between living in village in Poland and having major city 160km away where salaries are x4 and more for people with same xp[0] is already sad (and motivating) enough :P
[0] measured in years of xp.
[0] measured in years of xp.
Which salaries are that different in Poland rural vs major cities?
Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
Oh, I just realized that I've probably expressed myself kinda poorly because now it sounds as if that gap was a result of "location adjustments"
I meant that "location adjustment" just increases the gap to the already existing gap made of "attractive place(big city) - bigger companies - bigger salaries" factor.
>Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
I'm not exactly aware of how common it is here
I meant that "location adjustment" just increases the gap to the already existing gap made of "attractive place(big city) - bigger companies - bigger salaries" factor.
>Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
I'm not exactly aware of how common it is here
It's very common among people working remotely through various consultancies for Roche.
During my time there a typical project would have 30-40% of the personell living either in a small town or in the middle of nowhere.
During my time there a typical project would have 30-40% of the personell living either in a small town or in the middle of nowhere.
Why, because it's super cheap?
And how long is the commute into the city?
I think this is how it's going to be in America soon.
And how long is the commute into the city?
I think this is how it's going to be in America soon.
Assuming it's similar as in Lithuania - price is one of main points. You get a sweet house with a reasonable lot instead of a tiny flat. Likely better access to nature, more calm environment etc. If you're fine with a run down house and want to fix it up yourself, it's easy to buy a liveable house with a garden and whatnot in bumfucknowhere for really cheap. Cheap as in less than a year's salary of a programmer in a city.
Commute varies a lot depending on specific location. Want to live in a village in a national park? You're looking into at least a good hour off-peak to two hours including city traffic. Random small town? May be an hour, may be two. If you want to stick close to your parents and they happen to live deep in backcountry... You may be looking into 3-4h one way depending on which city the company is located in.
Commute varies a lot depending on specific location. Want to live in a village in a national park? You're looking into at least a good hour off-peak to two hours including city traffic. Random small town? May be an hour, may be two. If you want to stick close to your parents and they happen to live deep in backcountry... You may be looking into 3-4h one way depending on which city the company is located in.
Damn 3-4 hours would prob be too much. Maybe you go to the city for a week at a time for work.
1-2hrs is reasonable for a shoot into the city.
I think this will become very popular.
1-2hrs is reasonable for a shoot into the city.
I think this will become very popular.
Judging how overrepresented are fathers of 4+ there I think it's mainly because the cost of real estate.
Why wouldn't those companies use contract labor right now? There's nothing stopping them.
You could flip the question around & say, “The fact companies like this, which are mostly rational companies that have ample time & resources to research contracting or outsourcing as alternatives, and yet are choosing not to must mean the economic value of contracting and outsourcing is less than relocating long-term salaried employees.”
In other words the question is, “Given that contracting and outsourcing are deemed to be worse options by rational actors, what reasons make this true?”
In other words the question is, “Given that contracting and outsourcing are deemed to be worse options by rational actors, what reasons make this true?”
Outsourcing failed 20 years ago and it will fail now for the same reasons it did then.
The conditions are different now. Infrastructure is better, foreign workers are better trained, American company culture is different (ceos of Microsoft and Google both Indian), and the possibility of American workers creating political friction is becoming non-negligible.
Unless the workers in the Philippines are willing to work US work hours, they aren’t the same. As someone who has managed teams in India, overnight delays in feedback can easily stretch weeklong epics across months. You just can’t rapidly iterate with timezone latency like that.
If your tasks are so well defined that a single feature request ticket can be fulfilled and satisfied on the first try, that’s cool but you’re likely not actually doing anything challenging and you’ve probably already outsourced to India.
If your tasks are so well defined that a single feature request ticket can be fulfilled and satisfied on the first try, that’s cool but you’re likely not actually doing anything challenging and you’ve probably already outsourced to India.
I did quite a bit of work little overlap. Me in Europe with clients in Japan or US west coast. Meetings on few overlapping hours and pretty much around-the-clock work was pretty good. Lots of time for deep work on both ends. If one side needs something, the other side can prepare it while former sleeps.
Maybe my clients and I got lucky because little hands-on management was required and specs were quite lax? But at least in some cases it works just fine.
Maybe my clients and I got lucky because little hands-on management was required and specs were quite lax? But at least in some cases it works just fine.
You'd hope the Iowan is more productive.
If they are equally productive, then surely they deserve equal pay.
If they are equally productive, then surely they deserve equal pay.
I don't think this is going to happen. Good developers all over the world know their price, demand it and get what they want because there's just so few of them.
Applying the current exchange rate and American standards regarding time off I'm currently making, as a front-end dev with 8 years under his belt, $60k+ before taxes in Poland, and I'm far from the highest earner among my peers.
Sure it's considerably less than the median US wage in this field, but still it's not like we're orders of magnitude away from you guys.
And note that Poland is a very popular destination for outsourcing.
Applying the current exchange rate and American standards regarding time off I'm currently making, as a front-end dev with 8 years under his belt, $60k+ before taxes in Poland, and I'm far from the highest earner among my peers.
Sure it's considerably less than the median US wage in this field, but still it's not like we're orders of magnitude away from you guys.
And note that Poland is a very popular destination for outsourcing.
Or you can consider the reverse, it is not American tech workers who are overpaid, but remote workers who are actually underpaid. Would it be so bad if $T companies could not discriminate remote workers?
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
This is a great deal for Stripe, but bad for workers. $20k could easily be eaten up just on moving expenses (breaking a lease, hiring movers, etc). Let’s say an engineer making $150k year manages to frugally move for only $5k. That means, after one year they’re already loosing money. And when it comes to find a new job, they very well be in a tighter labor pool compared with what they had in NYC or SF.
> but bad for workers. $20k could easily be eaten up just on moving expenses
That's the point of the $20k, to cover the move. The deal is to keep your job at 90% of your salary while potentially living in a place that is only 75% (or less) of the cost of living as SF/NY. Get yourself a nice big place, some indoor/outdoor breathing room, etc.
That's the point of the $20k, to cover the move. The deal is to keep your job at 90% of your salary while potentially living in a place that is only 75% (or less) of the cost of living as SF/NY. Get yourself a nice big place, some indoor/outdoor breathing room, etc.
90% of your 2020 salary.
I would not be shocked if next year the people who took this deal were not given raises as high as Bay area employees because "lower cost of living".
I would not be shocked if next year the people who took this deal were not given raises as high as Bay area employees because "lower cost of living".
Let's say the 20k is a wash on moving.
Your 150k/year engineer is going to net about 100k, dropping it to 135k/year will have a net of about 90, so round numbers call it a 10k "loss" after taxes on income.
So if they save 1k/mo in expenses, they are ahead 2k a year net. I've made moves before that shifted my monthly expenses far more than that.
It's not obvious there aren't win-win version of this.
Your 150k/year engineer is going to net about 100k, dropping it to 135k/year will have a net of about 90, so round numbers call it a 10k "loss" after taxes on income.
So if they save 1k/mo in expenses, they are ahead 2k a year net. I've made moves before that shifted my monthly expenses far more than that.
It's not obvious there aren't win-win version of this.
Are there any states that tax 30+% on income? That's a ridiculously high number. Every other state has lower taxes than California.
There’s a myth about California’s sky high taxes. Looking at the overall tax burden (sales, property, income, etc) as a percent of income, CA doesn’t really even crack the top 10 states.
California figures are distorted by existing long term property owners effectively getting a windfall at the expense of more recent property owners.
This is not true, California does not have the highest tax rate in the nation.
The word “rate” is important here.
The word “rate” is important here.
Try this with an income tax estimator. You need FICA, state, local, federal etc. people often underestimate all of this when they are tossing tax rates around.
Effective tax rate for a single earner of 150,000 in NYC with no extra deductions is a bit over 32%.
Remember that the before-tax delta here gets applied at the marginal rate, so it's always going to be knocked down a fair bit for higher earners; the net impact will be smaller.
Anyway I assumed above leaving NYC for somewhere else in NY. It's easy to come up with scenarios where you might actually take home more with the pay cut (e.g. SF, CA -> Houston, TX). Housing costs there would be way lower (less than 1/2?).
Effective tax rate for a single earner of 150,000 in NYC with no extra deductions is a bit over 32%.
Remember that the before-tax delta here gets applied at the marginal rate, so it's always going to be knocked down a fair bit for higher earners; the net impact will be smaller.
Anyway I assumed above leaving NYC for somewhere else in NY. It's easy to come up with scenarios where you might actually take home more with the pay cut (e.g. SF, CA -> Houston, TX). Housing costs there would be way lower (less than 1/2?).
You could move to almost any other state and end up ahead. CA's extreme taxes and the bay's high cost of living are easily more than the 10% you'd lose in salary, especially if you move to a state with no income tax.
And they have moved their partner and possibly kids to an area with lesser opportunities - and may have lost the ability to go back to a higher COL.
> That means, after one year they’re already loosing money.
Only if you live in a van, by yourself. Most of that money is going to a landlord, or the bank.
There are quite a few reasons you could decide to do this. Huge promotion for your partner (it's great that we make so much money, but there are plenty of people with higher earning potential than us, and you might have married one.) Ill family member. Pulmonary disease. In-state tuition for your twin children. Continuing education, or plans to switch careers or retire in a few years. All of these may end up being cheaper for you than the $15k a year you're losing.
Only if you live in a van, by yourself. Most of that money is going to a landlord, or the bank.
There are quite a few reasons you could decide to do this. Huge promotion for your partner (it's great that we make so much money, but there are plenty of people with higher earning potential than us, and you might have married one.) Ill family member. Pulmonary disease. In-state tuition for your twin children. Continuing education, or plans to switch careers or retire in a few years. All of these may end up being cheaper for you than the $15k a year you're losing.
> Let’s say an engineer making $150k year manages to frugally move for only $5k. That means, after one year they’re already loosing money
How do you come to that conclusion without taking COL into account?
How do you come to that conclusion without taking COL into account?
[deleted]
$20k is just relocation. Not to make up for the reduction in salary.
[deleted]
Even entry level at stripe is above $150k:
https://www.levels.fyi/company/Stripe/salaries/Software-Engi...
https://www.levels.fyi/company/Stripe/salaries/Software-Engi...
Regardless of whether a 10% salary cut is more than offset by a decrease in cost of living, the idea of an established employee, whose labor output you already currently value at their current total comp level, being paid less solely because they translate on the surface of the earth to a new coordinate is insulting and ridiculous.
They aren’t suddenly less valuable to you. Their impact on revenue hasn’t suddenly changed.
I would never accept such a deal. Whether I am moving to a lower cost of living area or not, that is my business and none of my employer’s business. My employer and I have an agreement about my pay based on how they value my labor and how I value my time. I am looking for raises not cuts. And raises are a function of my impact on revenue. Whether I live in Manhattan or Madison utterly plays no role in this, full stop.
This very likely would be a reason to leave a company, or never consider working for them in the first place.
They aren’t suddenly less valuable to you. Their impact on revenue hasn’t suddenly changed.
I would never accept such a deal. Whether I am moving to a lower cost of living area or not, that is my business and none of my employer’s business. My employer and I have an agreement about my pay based on how they value my labor and how I value my time. I am looking for raises not cuts. And raises are a function of my impact on revenue. Whether I live in Manhattan or Madison utterly plays no role in this, full stop.
This very likely would be a reason to leave a company, or never consider working for them in the first place.
I was watching a DJ from West Oakland on Twitch, and she was very excited that she was moving to SF next week. She said that because all the tech people left, rents in SF have fallen a lot, so much so that she's actually saving money moving to SF.
It'll be interesting to see how that holds up after this is over. How many of the large employers will continue to allow work from home, or at least not work from SF?
It'll be interesting to see how that holds up after this is over. How many of the large employers will continue to allow work from home, or at least not work from SF?
[deleted]
SF rents have fallen significantly only in "undesirable" areas which are mostly offices and high rises where rents were exorbitant anyway.
My friend's shoebox apartment was $3300/mo which he renewed for another 13 months for $2200/mo with 2 months rent free.
However, more residential neighborhoods have seen rents drop by only a little bit.
My friend's shoebox apartment was $3300/mo which he renewed for another 13 months for $2200/mo with 2 months rent free.
However, more residential neighborhoods have seen rents drop by only a little bit.
"The median 1-bed price in San Francisco last month was $2830, a 20.3% decrease from a year ago. Not only is this drop among the largest yearly decreases Zumper has ever recorded in our history of tracking rental prices, but it was also the first time the median 1-bed price in San Francisco was priced below $3000. These combined trends show just how drastically the market has changed in the nation’s most expensive city to rent."
- https://www.zumper.com/blog/zumper-national-rent-report-octo...
- https://www.zumper.com/blog/zumper-national-rent-report-octo...
How popular, in terms of audience, is DJ video streaming on Twitch? Can you share more about this phenomenon?
You know, I just discovered it recently myself. There are enough DJs that you can basically get music 24/7. Maybe that's a function of the pandemic, and it will slow down once people can go out again and the DJs can work again.
As far as popularity, it's totally random. I'll start with the Sofitukker stream in the morning, and just follow the raids all day. Some of the DJs will have a few 1000 streamers, and some will have 50.
After a while Twitch starts suggesting channels. Looking right now at all the suggested channels, they range in viewers from 60 to 808.
As far as popularity, it's totally random. I'll start with the Sofitukker stream in the morning, and just follow the raids all day. Some of the DJs will have a few 1000 streamers, and some will have 50.
After a while Twitch starts suggesting channels. Looking right now at all the suggested channels, they range in viewers from 60 to 808.
I think I'd like to watch someone produce live on Twitch, collaborating with the audience as one progresses. Something like what Dr Mix does, but live and original: https://www.youtube.com/watch?v=I0djbmrnEBc&t=178s
The challenge with this is further career advancement. Even if you stick with Stripe, the most important and innovative work tends to stay close to headquarters, if only because the executives like to keep tabs on it. And it forecloses on the possibility of jumping ship to another company if they're doing more interesting work, or hopping aboard the next startup wave before the rest of the country knows about it.
I could see it making a lot of sense for the rank & file engineer who just wants to close their JIRA tickets and go home to their family, though. And that's really the economically rational part about this: it doesn't make sense for those jobs to stay in the Bay Area when they can be done from anywhere, by anyone with baseline software engineering prowess. Over the last decade SV tech companies have grown more and more of these roles, and it's good for both the company and the worker if they can do them from areas where housing and CoL isn't so ridiculous as the Bay Area. (Not as good for the worker when the company discovers that folks in Pakistan, Thailand, and Czech Republic can do these jobs just as effectively for $30K/year, though.)
I could see it making a lot of sense for the rank & file engineer who just wants to close their JIRA tickets and go home to their family, though. And that's really the economically rational part about this: it doesn't make sense for those jobs to stay in the Bay Area when they can be done from anywhere, by anyone with baseline software engineering prowess. Over the last decade SV tech companies have grown more and more of these roles, and it's good for both the company and the worker if they can do them from areas where housing and CoL isn't so ridiculous as the Bay Area. (Not as good for the worker when the company discovers that folks in Pakistan, Thailand, and Czech Republic can do these jobs just as effectively for $30K/year, though.)
Agreed on this one. I was with a company, since the beginning, that ended up blowing up.
In the middle of its growth, I had to move, and ended up becoming a remote engineer.
Since the acquisition, all my colleagues (who all started at the same "level" as me) have greatly surpassed me in terms of title, responsibility, and salary because "they were there".
I'm not upset or anything, and in fact happy we all won in our own ways, but just echoing the idea that being nearby matters for career advancement!
In the middle of its growth, I had to move, and ended up becoming a remote engineer.
Since the acquisition, all my colleagues (who all started at the same "level" as me) have greatly surpassed me in terms of title, responsibility, and salary because "they were there".
I'm not upset or anything, and in fact happy we all won in our own ways, but just echoing the idea that being nearby matters for career advancement!
I've seen this play out with several companies over the last 20 years.
Company starts to push employees to work remote from anywhere. It sounds great and it is great for as long as you keep and enjoy that same job. Once you move into the boonies, company knows they have leverage on you. You can no longer ragequit on Thursday and start at a new place with a better salary next Monday. You'll be forced to hold on to this job even if it turns sour. Or what if there are layoffs.
Then you're stuck in the boonies with no other employment choices other than compete for other remote jobs at a much reduced salary now.
Moving back to the Bay Area is very difficult if you sold the house when moving out.
TL;DR: Only move for personal reasons, not for company incentives.
Company starts to push employees to work remote from anywhere. It sounds great and it is great for as long as you keep and enjoy that same job. Once you move into the boonies, company knows they have leverage on you. You can no longer ragequit on Thursday and start at a new place with a better salary next Monday. You'll be forced to hold on to this job even if it turns sour. Or what if there are layoffs.
Then you're stuck in the boonies with no other employment choices other than compete for other remote jobs at a much reduced salary now.
Moving back to the Bay Area is very difficult if you sold the house when moving out.
TL;DR: Only move for personal reasons, not for company incentives.
This is a false dichotomy. There are hundreds of millions of Americans that live in places that are neither the Bay Area nor the boonies.
In any of the 50 biggest metro areas in the US, there are employment choices for programmers.
In any of the 50 biggest metro areas in the US, there are employment choices for programmers.
You're right, of course. What went unsaid is that with these offers the strong temptation is to move out to areas where you truly want to live, not to just another slightly cheaper large metro area with jobs.
Everyone I know who took these moves went to places like a large farm out nowhere, or a cabin deep in the forest, or to a small village in the mountains or on a faraway beach. Places which defined paradise to each individual, with wonderful quality of life (but no jobs).
Personally I was very strongly tempted to move to Kona (Hawaii) keeping my full silicon valley salary. Not exactly a hotbed of replacement tech jobs though, so I guess I'm glad I didn't.
Everyone I know who took these moves went to places like a large farm out nowhere, or a cabin deep in the forest, or to a small village in the mountains or on a faraway beach. Places which defined paradise to each individual, with wonderful quality of life (but no jobs).
Personally I was very strongly tempted to move to Kona (Hawaii) keeping my full silicon valley salary. Not exactly a hotbed of replacement tech jobs though, so I guess I'm glad I didn't.
OK, I see what you're saying, thanks for the clarification.
I guess there is a tendency to overreact and think, "I want the exact opposite of the Bay Area", when what you really want is cheaper rent and a tad less shit on the sidewalk.
I guess there is a tendency to overreact and think, "I want the exact opposite of the Bay Area", when what you really want is cheaper rent and a tad less shit on the sidewalk.
A flat 10% cut rather than a dynamic COL adjustment?
Some people could definitely make that work. A move to a no income tax state with low COL could come out very ahead. Of course, the career implications could be more negative than it’s worth, but there’s a reason why back office / administrative / operations staff tend to be easier to move to a different state relative to technical talent, which is more densely concentrated in fewer regions.
Some people could definitely make that work. A move to a no income tax state with low COL could come out very ahead. Of course, the career implications could be more negative than it’s worth, but there’s a reason why back office / administrative / operations staff tend to be easier to move to a different state relative to technical talent, which is more densely concentrated in fewer regions.
One thing I've had trouble modeling is the apples-to-oranges future value characterization of property in California (and New York, I guess) vs most of the rest of the country.
In CA, property values are sky high to begin with and you have to pay property tax on them, but if you buy in certain areas, you stand a fair chance of your property appreciating by 10% or more per year.
Elsewhere (Smalltown USA), property values are 1/10th what they are in those same areas of CA, but you generally can't expect anywhere near the same appreciation on the property.
So what, do you consider the appreciation as "inflow" (vs "income" because it's taxed differently when you sell) and take it into account when you are doing retirement planning? You definitely could, and maybe discount the appreciation by some pessimism factor to account for some possible future situation where housing values get get in half.
For me it's a lot easier to think about if I just live somewhere where a house in 30 years will (inflation adjusted) cost very roughly what it does today.
In CA, property values are sky high to begin with and you have to pay property tax on them, but if you buy in certain areas, you stand a fair chance of your property appreciating by 10% or more per year.
Elsewhere (Smalltown USA), property values are 1/10th what they are in those same areas of CA, but you generally can't expect anywhere near the same appreciation on the property.
So what, do you consider the appreciation as "inflow" (vs "income" because it's taxed differently when you sell) and take it into account when you are doing retirement planning? You definitely could, and maybe discount the appreciation by some pessimism factor to account for some possible future situation where housing values get get in half.
For me it's a lot easier to think about if I just live somewhere where a house in 30 years will (inflation adjusted) cost very roughly what it does today.
There's also enormous risk embodied in the sky-high real estate prices in CA and NY, namely that they might not continue appreciating, or could even flatten and drop somewhat. The prices in CA are driven by the extraordinary scarcity of housing relative to the demand created by the booming tech industry. Real estate is priced at the margins, and if the tech outflow accelerates it could tip to a new lower baseline relatively quickly (see places like Miami and Las Vegas in 2008). If that happens you risk being underwater by substantial amounts.
Living in a tech hub gives you access to a super-liquid job market. If you take the offer and move elsewhere, and you suddenly get a new boss you can't work with, you've got a lot less options.
Probably a really good plan for the companies though: great way to have a loyal workforce that won't switch jobs for a 10% pay bump.
Probably a really good plan for the companies though: great way to have a loyal workforce that won't switch jobs for a 10% pay bump.
Question is: Has the bonus/advancement framework changed?
You could go -10% now but get it back in n amount of time. Still "behind" in a sense, but potentially ahead if you move to a low col area. I pay for a whole house in north Atlanta with less than people pay for an apartment in SF (houses also build up equity).
You could go -10% now but get it back in n amount of time. Still "behind" in a sense, but potentially ahead if you move to a low col area. I pay for a whole house in north Atlanta with less than people pay for an apartment in SF (houses also build up equity).
If this became a thing more tech companies offered, I could see it legitimately shifting political dynamics over like 10 years. The difference in some states switching colors is sometimes quite small, and California isn't itself at risk of switching colors anytime soon.
Why not live in a tax arbitrage area like the wa side of hood river or Vancouver wa. You could basically pay no income tax then do most of your shopping in Oregon for no sales tax. You would come our way ahead and it’s a lot cheaper
Ironic, I was offered almost $10k to relocate to the Bay Area a few years ago as part of my signing bonus. Having lived here for a few years, I'd love to be offered $20k to move away...
I'm curious about how companies that rely a lot on immigration to fill positions how they are going to convince people to move to the US and work from home.
I wonder what % of current SV employees were planning to stay there even after retirement, regardless of whether they ve made a family/house there.
This is an astonishingly good offer, as NY and SF are double to 4x the cost of living of other places in the US (let alone places outside the US).
[deleted]
What about stock refreshers? I believe stock grants make up a pretty big portion of one's total compensation at large tech companies. According to data shared by Google and Facebook employees [0], it seems like stock makes up ~40% of your compensation for a Senior L5 role.
Would those also be CoL adjusted?
[0] https://www.levels.fyi/SE/Google/Facebook#
Would those also be CoL adjusted?
[0] https://www.levels.fyi/SE/Google/Facebook#
I don't know the "official" policy on this yet, but anecdotally they do not decrease your existing grants (which vest over 4 years), but the new location could affect the new RSUs you will be granted while in the new location.
I assume there wouldn’t be any public policy for that. I think privately they’d calculate that remote employees have a weaker job market and less refreshes will be required to retain them.
Do they offer 10% TC increase in case you move to NY/SF?
Shows just how valuable neo-yuppies are to local economies and politics. Go home, you actually make it worse for everybody else. Plus, your vote matters in any other state.
They should pay me $20K to stay away.
this is ridiculous, "the workers who take up the offer will have to take a 10% cut to their compensation." so you get 20K up front, which as jdavis mention, could be used up in moving, then you have to accept a 10% pay cut. so in reality, you're losing all around. just because someone moves to a new area, doesn't mean they should be punished by having a decrease in salary. this is way a scumbaggish way for a company to make money. anyone working for stripe better rethink things and go work for another company.
That's a pretty ridiculous statement. Workers that are paid massive salaries in the likes of SF & NYC is because the cost of living in those cities justify it.
So you're on 150k in SF say, you move to, I don't know some small city in Texas, you get 20k to move, you make 135k a year and your cost of living has probably dropped by 70%. That doesn't sound like a "scumbaggish" move to me. That sounds like a company trying to entice it's employees to get out of the crazy expensive cities.
So you're on 150k in SF say, you move to, I don't know some small city in Texas, you get 20k to move, you make 135k a year and your cost of living has probably dropped by 70%. That doesn't sound like a "scumbaggish" move to me. That sounds like a company trying to entice it's employees to get out of the crazy expensive cities.
>Workers that are paid massive salaries in the likes of SF & NYC is because the cost of living in those cities justify it.
This is incorrect. Workers are paid massive salaries because those same workers have an option of going to other employers who are willing to offer massive salaries.
This is incorrect. Workers are paid massive salaries because those same workers have an option of going to other employers who are willing to offer massive salaries.
So your logic here is, "they're paid a lot because everyone else pays a lot as well".
That sounds like circular reasoning to me. What's the base reason for employers offering massive salaries?
That sounds like circular reasoning to me. What's the base reason for employers offering massive salaries?
It's a market economy. No one decided one day to offer a certain salary, the market has figured it out over time (and will continue to do so as conditions change).
Supply and demand in the Bay Area. If I moved to Alabama, my TC would hands down drop unless I got lucky with a remote position.
Employers offer massive salaries when they can't find anyone cheaper. Just like people pay more for desirable beach front or mountain view property. Not only does it have to be desirable, but it has to be in relatively limited supply, such that the seller has options and so the buyer has to compete to win the seller, and obviously payer has to be able to pay.
Edit: If you continue down the road of reasoning, the desirability of an employee is related to how much net income the employee contributes to. The employer is betting that the work a specific programmer does will be integral to yielding billions in profit, so a few hundred thousand is a no brainer.
In contrast, a hotel on a desirable piece of land does not need to offer housekeepers massive salaries even though the work the housekeepers do is integral to the hotel's profits, because the housekeepers individually are more replaceable than a programmer.
Edit #2:
Note that doctors get paid more in rural, low cost of living areas than in high cost of living areas.
Edit: If you continue down the road of reasoning, the desirability of an employee is related to how much net income the employee contributes to. The employer is betting that the work a specific programmer does will be integral to yielding billions in profit, so a few hundred thousand is a no brainer.
In contrast, a hotel on a desirable piece of land does not need to offer housekeepers massive salaries even though the work the housekeepers do is integral to the hotel's profits, because the housekeepers individually are more replaceable than a programmer.
Edit #2:
Note that doctors get paid more in rural, low cost of living areas than in high cost of living areas.
you know what's pretty ridiculous... your 25 minutes old account attempting to call me out. you work for stripe or at another company that's doing or planning this?
>you know what's pretty ridiculous
Attacking the messenger because you have no rebuttal. Also, it is ridiculous reading comments that have the sentence structure of a person still in primary school.
Attacking the messenger because you have no rebuttal. Also, it is ridiculous reading comments that have the sentence structure of a person still in primary school.
Under this logic, the "same" job shouldn't pay more in more expensive cities; But it does. Why doesn't the reverse hold as well?
People are calling this out as the company taking advantage, but it's a least plausible that it's win-win for some employees.
People are calling this out as the company taking advantage, but it's a least plausible that it's win-win for some employees.
They could easily be paying half their rent (and could approach paying just 20% depending on the situation.) Most people will probably save money.
>They could easily be paying half their rent (and could approach paying just 20% depending on the situation.) Most people will probably save money.
I was offered this "choice" back in 2013. Despite the fact that I (and my co-workers) were almost completely remote already, we were told that if we didn't relocate to Tallahassee, FL from NYC and accept a 20% pay cut, we would need to find new employment.
Even worse, should we accept this "generous offer" we would be guaranteed employment for 12 months (presumably long enough for them to find and hire locals who are compensated less, then have us train them).
I did the math and while I could certainly save on rent, the costs of an automobile, its fuel and maintenance, including insurance made the transition close to a wash for me.
I'd also point out that NYC is a wonderful, urban place to live. While Tallahassee is a typical sprawling, suburban place with limited (although more so than some other parts of Florida due to UofFL and it being the state capital) culturally diverse stuff.
I chose not to do so (as did all but one of my colleagues -- who did so at great personal sacrifice to make sure she could continue to support her family) and haven't looked back.
My experience is that such plans tend to be a salary dump by the company, made worse by the ability to slowly replace those who relocate with much cheaper local resources.
Why would you want to uproot your life (and that of your family, if you have one) just so you can be replaced by someone cheaper in the not-so-distant future?
That's not to say such a plan isn't a good thing for some people, but I found it to be not worth it.
I was offered this "choice" back in 2013. Despite the fact that I (and my co-workers) were almost completely remote already, we were told that if we didn't relocate to Tallahassee, FL from NYC and accept a 20% pay cut, we would need to find new employment.
Even worse, should we accept this "generous offer" we would be guaranteed employment for 12 months (presumably long enough for them to find and hire locals who are compensated less, then have us train them).
I did the math and while I could certainly save on rent, the costs of an automobile, its fuel and maintenance, including insurance made the transition close to a wash for me.
I'd also point out that NYC is a wonderful, urban place to live. While Tallahassee is a typical sprawling, suburban place with limited (although more so than some other parts of Florida due to UofFL and it being the state capital) culturally diverse stuff.
I chose not to do so (as did all but one of my colleagues -- who did so at great personal sacrifice to make sure she could continue to support her family) and haven't looked back.
My experience is that such plans tend to be a salary dump by the company, made worse by the ability to slowly replace those who relocate with much cheaper local resources.
Why would you want to uproot your life (and that of your family, if you have one) just so you can be replaced by someone cheaper in the not-so-distant future?
That's not to say such a plan isn't a good thing for some people, but I found it to be not worth it.
I think you're overreacting. If you're making, say, $400k in total comp at Stripe in San Francisco (which doesn't seem unreasonable[0]), you could move somewhere with drastically lower cost of living for a cut of only $40k a year. There aren't very many opportunities to live wherever you want and make $360k, period, so it's still likely a net win for the employees.
[0]: According to levels.fyi - https://www.levels.fyi/company/Stripe/salaries/Software-Engi...
[0]: According to levels.fyi - https://www.levels.fyi/company/Stripe/salaries/Software-Engi...
What's the income tax like in California?
California also has one of the highest state sales tax rates, and individual counties also put their own sales taxes on top of that, which can add up to 10.5% in the worst case, so you get taxed "coming and going".
The administration of sales tax was baffling to me when in California. Things had a price on them and when I got to the counter the price paid was different. However the amount paid seemed to vary across California. How this came to be and how it is tolerated remains a mystery to me.
In the US, sales tax is not listed in the price unlike VAR in Europe. Counties and Cities often have additional and varying sale taxes in addition to the State's percentage.
I don't live there, but a quick search shows it in roughly the 10% range for the salaries we're talking about (as a single tax filer).
But - uh - I think a lot of people would be happy to keep 90% of their really high silicon valley TC if they moved to another region and they got a one-time $20K relocation bonus to top it off. I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area. That said - it only stays true if they stick with Stripe. As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back.
I see these options as really good offers for those who really want to temporarily move somewhere else, like the company/manager/whatever they currently work for, and want to come back to the tech hub in 2-3 years (new parents? young/childless married couples? someone who misses their friends "back home"? Idk). For everyone else, I don't know why you'd move away unless you were already planning on it anyway. Your savings will be short term gained and you will lose all your friendships locally. You won't likely get to keep that $400K+ TC by sticking with permanently remote jobs or by not living in a tech hub city unless you never lose your job. (Uncommon) For people who hated living in NYC or SF Bay Area then maybe this is the winning ticket to help them kickstart their jump into another region.
If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)