Too many engineers today, perhaps like sports players, take a big salary, project it across 30 years and then say "Wow I've got millions headed my way, do I really need to bag my lunch?"
I've watched as they became both broke and depressed as the wave that was supporting those salaries and the technology that was supporting their employment have broken (as they always do) and they are suddenly "too old and too out of date."
Like the guy who was making $200K/year as a SOAP architect for some package that managed really expensive enterprise server and storage gear. When the wave passed and people moved to cheap white box servers in abundance using things like Docker or Chef to run and manage them, this guy walked into a world at 45 years of age with zero applicable experience to your distributed server cluster based company. And he is slowly burning what savings he had because the only entry level programmer job he could get is paying him $85K and his take home pay doesn't completely cover his burn rate (he optimistically expects to be promoted to a high paying job as soon as they see what he can do.)
If you are living the high life as an in demand engineer please don't be that guy. Start planning to provide funds for your kids education, or if you're not having kids ever then a fund to pay someone else's kids to take care of you when you're too old to work. Cut out recurring expenses in your life where ever you can and put excess money into savings or investment vehicles so that it can start working for you by earning more money. Understand that life is change until you die. Anticipate change to avoid having change drive your decisions.
The "lifestyle inflation is evil" mantra never made sense to me. The definition I usually find is "living better than a college student once you are a working professional," so apologies if you mean something different.
I was raised to save 15% for retirement, to never carry a credit card balance, to build a 6 month emergency fund, etc. All of these priorities come first. But, after they are funded:
I am in software in part because because I like it, but also because it enables the life I want: a decent apartment to myself, a decent car, some international travel, not having to agonize over small day-to-day purchases. I want these things much more than I want early retirement (which is not particularly useful if all I can do with it is sit in a low-cost-of-living-city home and eat Ramen). If you told me I'd be a broke college student forever, I'd probably go into theater.
Why should we compromise parts of our life for more money, and then carry that money in our savings accounts perpetually? It really seems like you should either use the money in a way that's important to you, or optimize for free time instead.
Silicon Valley as we imagine it might die, and I'm set to absorb a few months. I can't imagine the world will stop wanting code. And if it does, I can change careers like my parents both did in their 40s.
I think he's referring to how most people do it - carrying debt, little or no savings, paycheck to paycheck no mater how they make. And when they do get a raise, instead of putting the extra money towards getting on track financially, they just bump up their lifestyle so that they're always living right on the edge of what they can manage.
I remember moving to SF and making ~$110k, and renting a ~$2500 studio in a mediocre part of town with no car (I got a motorcycle eventually) and it was difficult to save any money, even if I wasn't bankrupting myself.
there's always some penny pinching proselytizer trying to tell other people how to live.
i find it better to focus on making more money.
They say "$2k for an apartment? That's way too much! Why don't you move to [place]?"
Honestly if you haven't rented an apartment in the last few years, you have no idea. You also have no idea how lucky you are to get that rent control subsidy.
You can go manager or freelancer, of course.
I was stoked to move to cheaper area and work remote for these reasons, but it put a serious brake on career/income growth. And all it takes is some old-school mgmt to come in and then you are treated like some pariah.
The property tax rate is 1.1826% of assessed value in SF (1% state + a small % local). And your initial assessed value is based on your purchase price.
I think it's more realistic to say you'd be spending close to 4500/month net assuming you didn't live in a place with an HOA. If you live in a condo with an HOA, you could easily be spending 5000 to 5500/month.
On the plus side, at least you get to deduct all that mortgage interest and property tax on your federal taxes. When you are paying 3k/month+ in interest and taxes, that's a really nice tax advantage over renting a similar property.
Not only do you need to try and save as much as possible (which is really hard if you are not single and able to live with roommates), you need to be constantly learning.
If you're attracted to the boom, but don't have the wherewithal to get rich, by definition you're not the type of person who plans well.
Very few things require genuinely novel pieces of code to work. Yes, lots of value can be captured using code, but you could totally start something like airbnb with a lot of manual labor clicking in a GUI.
Djikstra said "Beware premature optimization" and that's quite true. I think automation should be used when things hurt to bad to do manually anymore. For some people, that's any task which must be performed twice and then you write a script. For others it might be years manually updating excel for bookkeeping every night. One can go real far manually updating excel...
For the few startups that do experience significant growth, it's much easier to find talent (engineering and otherwise).
This is why a product I was working on almost got killed. The senior engineer working on it wanted perfection before delivery. The project was already one year overdue. He suddenly came in one day and rushed me to finish up something and he wrapped up a couple things and we launched at the end of the week.
Found out that the project was going to be axed if we didn't deliver very soon.
I agree, but this is mostly true because there's so much low-hanging fruit out there. If you look at the current successful startups like Uber and Airbnb, they're really trivial applications. That doesn't mean they can't create huge amounts of value by "trivially" repackaging services and connecting people.
Once the low-hanging fruit is developed during the next 10 years or so we can finally start focusing on actual high-tech engineering startups.
(Soylent doesn't even make the stuff. That's outsourced to Jasper Products in Joplin, MO.[1])
I feel like I should just make this my email/social media signature since I say it so often:
A perfect requires these things:
- Perfect market information
- No participant with market power to set prices
- Non intervention by governments
- No barriers to entry or exit
- Equal access to factors of production
- Profit maximization
- No externalities
The less you have those, the less efficient your market is. "Free markets" aren't these magical things that arise on their own in nature. They are carefully crafted and maintained artificial environments and most are far from efficient.
Market forces are not a silver bullet that will solve all problems if we just sit around and wait long enough for the invisible hand to do everything.
Companies don't have to be told to improve, either, not when their competitors are improving and eating market space. At least, that's how it works in theory. A lot of industries have turned into demilitarized zones, both sides opposed but neither making a move. Telecom is the best example of how bad this gets.
The telcos have stalled residential broadband for decades, leaving most of the US stuck with early 2000s-level cable modems or DSL. None of them will make a move.
So what happened? https://fiber.google.com/about/
And yet even telecoms have invested huge swaths of capital to get us to 3G then LTE.
This lack of competition leads to a sort of mini-monopoly, meaning that they basically have no reason to not jack up prices.
That is, until Google comes along and kicks them out, as another comment points out.
https://www.techdirt.com/articles/20131012/02124724852/decad...
The non-market solutions would be something like these:
1 - Price controls
2 - Government approval of business ideas
3 - Rationing non-essentials
4 - Licensing engineers
except to define property rights and enforce them, which is kind of significant 'intervention'.
By saying things like "Good, they will fail, people won't be able to afford to live here and they'll leave" you're completely overlooking the human costs and implications.
Things don't just change overnight. It's an slow, painful, eventual decline. Things shouldn't need to be pushed to a breaking point for us to make necessary changes to alleviate these problems.
It's not that the free market solution is great. It's that all other possible solutions are even worse.
"Everyone rides an Uber" is great for the Uber drivers. "People spend too much on organic produce" is great for the farmers. "Even bad engineers are in high demand" is great for the mediocre engineers.
Housing is a problem, but this post didn't mention it.
So before we start making changes, what are the problems in your opinion?
And, then, what changes are you proposing?
Even mentioning Uber, organics, bad engineers and mediocre engineers ignores places like the south side of Chicago and any gradient between. It's not as pretty outside as you think it is.
I also forgot to apologize for mentioning Uber, organics, and engineering. You're right, but acknowledging the existence of those concepts I'm totally ignoring the South Side of Chicago.
But by bringing up Chicago, you're completely ignoring sub-Saharan Africa and Bangladesh. It's not so pretty there, either. Are you going to apologize for that?
Let's just remember that we should always mention regions of extreme poverty whenever we discuss something.
It's a complicated problem with many, many components. Nuance is more relevant than you think it is. Think of fractals and weather patterns.
An effect of SF: http://www.chicagotribune.com/news/globalcity/ct-global-city... Why it happens: https://en.wikipedia.org/wiki/Human_capital_flight
rant.
Maybe I'm a bit naively bitter on the subject, particularly after spending some time at Chicago's opengov hack nights. Something about it got very, very turned me completely away from modern civics and its problems solving. Much of it seems to stem from the same vain as high school grads building unmaintainable schools in "primitive" cultures many miles away.
My problem isn't that Uber, SF etc exist. Individually, "fuck yeah!". As a whole, though, they take the focus away from the nuance of actual problems and create comfort for those who can afford it. The poor, the mentally sick and the fringe simply aren't accounted for to the level that they can be. Especially after walking through SF streets earlier this year. It was infuriating to see so much homelessness and prosperity of achievement condensed in the same place. Chicago and NY have nothing on how sharp that difference was (although, I admit it might be selection bias).
Many techie-type folk my age tend to complain about the large economic/social problems. Very few of them ever take action - yet they complain about inaction! If that feeling is as pervasive as it seems, then maybe the problem just might be within some nuance that's not being addressed. When skill's diverted from that nuance towards Bay-like areas and their functions, then YES, they are part of the problem. Just maybe not directly or in an intuitive way.
One person says "collective values, worship of the free market." Another person says "there are poor people in Chicago." Finally there's a third person who says "people can't afford to live in their neighborhoods because cost of living got too expensive."
So they haven't agreed on the problem, but they agree on the enemy - it's the spoiled engineers and their high salaries.
Could it be possible that there are several problems at play here, at once? You can't look at situations as if they are black or white, or "us vs. them".
So your argument is that this is really bad at the moment, but over an unspecified amount of time, 'the market' will sort it out. No worries. No need to think about things. No need to consider things. Just the market. Isn't the market great.
I don't disagree with the points you made. But there is nothing free market about the housing market in San Francisco.
How so? There is a supply (although limited), and there is a demand. The landlords are interested to maximize their profits, but can not ask more than the market can bear.
But even if the owner would like to sell the land, and buyer would like to pay a lot of money, this is usually not allowed, for political reasons.
If let to operate more freely, free market economy would be efficient in increasing the density of homes in high-demand areas. This is very much not happening in San Francisco.
If people are willing to pay Manhattan-prices (and even more), the free market response would be to build at Manhattan-density.
That's a rather nonchalant way of saying something that will likely be a very sharp, painful transition. And when a boom-town the size of San Francisco implodes it can have a huge impact on the entire country.
Love the quote :)
I think it's fun to be flippant, but there still certain demographics that are being displaced and negatively impacted by the bubble.
Disclosure. I tried living in SF. The cost of living was too high. I left. Problem solved. Ta da, no bitching required
Based on your experience you described, you weren't displaced.
I was amazed by the people who felt entitled to a lower cost of living - all while blaming IT workers for gentrifying their beautiful oasis. I would have thought they lived in SF their whole life to feel that level of angst. More like a couple years. Intermittently. While their parents pay for their art degree.
A sense of entitlement is an English idiom for "having too high of expectations", and typically associated with narcissism. Expecting to not be displaced from your home after 20 years is not a sense of entitlement or narcissistic.
I'm trying to look at it in more brighter light, so I'll say that they can sell high their place (which is wonderful thing from a market player's prospective), then offer themselves as a gift to enrich some other lucky place (which is good for many under multiple reasons). It's a win-win!
People would rather argue in ivory towers about abstract problems that don't exist in the real world (sexism in video games, Internet feminism, etc), rather than work on unpleasant and unsexy problems that can easily be solved.
What's abstract or unreal about them? What's "Internet" feminism, for that matter? I'd say sexism in videogames is real... and the level of aggression in online discussions about that topic is almost asphyxiating, enough that I consider it a serious problem. Would you similarly argue that it's "unreal" to argue about sexism (or racism, or whatever -ism) in movies?
It's a shame you said this, because I'm in agreement with the rest of your post.
The opposite, I think. I recently started taking public transportation MORE often, because traffic on the freeways has gotten so bad.
1) Want to build a skyscrapper? Having the same housing density as Tokyo or Manhattan? No .. sorry .. think of the traffic or view or ... whatever.
2) The place you live in has become very valuable. Pay the appropriate property tax. Umm .. no .. sorry. We don't want to make live unaffordable for seniors or umm whatever.
The reality is just wealth distribution. Away from people who are young and new to the area and towards those who were here before.
Considering people seem to have planned their lives around the implicit expectation of the current tax structure, it isn't ridiculous for seniors on "fixed incomes" to be nervous.
But let's remember that seniors are the wealthiest age demographic, and those among them who are actually financially needy can be easily cared for while still not stifling all the hopes of young entrepreneurs.
> When people stop taking public transportation because it's fundamentally broken (ps - it's awful in SF) then it will force government organizations to re-think their planning.
I think what is much more likely is that the government will simply raise taxes to cover the shortfall and let the public transit die.
That kind of happened in other parts of the world (in the former socialist block). You know what happened afterwards? The significant demand for mass transportation encouraged private parties to step in. They weren't as good or as convenient compared to the former government-subsidized public one, but they solved the problem for a while.
But it seems there is such an unquestioning faith in "the invisible hand" that the mere suggestion that misrembered high school economics may be an oversimplification, let alone in error, is viewed as unspeakable blasphemy.
Particularly ludicrous is:
>4. Bad engineers? Yup, I've met some of them. They'll eventually leave too when the system weeds them out.
But I'd ask the prophet of the invisible hand these questions:
Isn't the current state necessarily exactly correct given the panglossian invisble hand?
How is it other's using the same hand waving also claim the bay area economy is a permanent feature? Heretics I presume?
If the invisible hand is going to correct the situation, when will it happen? Next week? A hundred years? Or "soon, my son, soon"
You are speaking of a free market that is highly theoretical, because there is no such "free market" in today's economy, no matter where you live. However, free market theory suggests that a situation such as SF is not possible under a free market.
San Francisco has a great deal of political might, which explains a lot of the founding contexts allowing it to survive in the way it does. Add the fact that employees cannot be held to an non-compete agreement, and you have a bunch of engineers stepping over one another to chase the next six month gig as the number of ridiculous startup options balloons to a totally unsustainable size.
Intractability issues of Nash equilibria aside, if that's your take on an article ostensibly about sustained market disequilibria, then I don't think you fully understand what a 'free market' is supposed to entail.
1. Some people can have more freedom than other people.
2. In a free market, rich people have more freedom than everyone else.
A free market is not truly free. Although this concept is frighteningly obvious it is incredibly hard to articulate. You are essentially telling people to get the fuck out of San Francisco because they're not rich enough.
Careful. Money=speech is a touchy subject. It implies that those with less money are somehow less important. That may be true from a libertarian absolute free market standpoint, but cities are not liberated markets. They are nests of overlapping interests and entrenched power brokers. Not everyone is free to move at the drop of a hat, nor should we expect them to bounce around chasing their market niche. We should respect that people want to live in community year after year without being forced out, or in, due to market fluctuations. There is value in establishing roots in a community beyond the financial.
Why does it take so long for the market to correct and why does the market allow such huge variance from normal?
I think the answer is obvious, people get acclimated to their environment very quickly and lose the ability to see systemic problems.
Therefore it seems the market will tend towards local minimum. Similar to how evolution works. It doesn't handle gross changes without a lot of pain.
> then it will force government organizations to re-think their planning.
Made me lol. As if any Government has ever changed it's offerings based on the market. They'll just keep paying public workers absurd wages to continue to suck because status quo is way more important than customer satisfaction when it comes to public entities.
http://www.twincities.com/2015/12/31/mark-dayton-wants-100-m...
A Government entity has no competition, or if they do (like the USPS for example) they can rely on subsidies from the Government and run at a total loss if they need to. I'm not saying this is a good or bad thing, but if you have a worker who knows their performance is tied to their ability to deliver a product and another worker who knows they're pay is coming whether the customers are happy or not, one of those is going to be motivated to make sure customers are happy and the other one is not, and they will act accordingly.
What do free markets and San Francisco NIMBYism have to do with each-other?
I'm glad we could stand by free-market narratives while we waste untold amounts of capital on nothing.
1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms.
2. Dumb startups? Good, they will fail, people won't be able to afford to live here and they'll leave.
3. People are spoiled? Uber is cheaper and more convenient in some cases than taking the local transportation. When people stop taking public transportation because it's fundamentally broken (ps - it's awful in SF) then it will force government organizations to re-think their planning.
4. Bad engineers? Yup, I've met some of them. They'll eventually leave too when the system weeds them out.
I too think it's weird here, but since I do enjoy my life in the Bay area enough, I'm happy to wait for the market to correct to normalcy. The people who are here just to chase the "me too's" will soon be forgotten.
EDIT: I should probably clarify my overall sentiment. People who come to SF and complain that this situation is less than ideal have the freedom to simply choose not to play. The cost of living is driven by the simple laws of supply and demand. Speak with your wallets, not with your mouths.