But I would characterize this as a wealth distribution, and overall net positive for the country. People who don’t have the opportunities to work at the top companies in the Bay Area or NYC or Boston now have better access. And the wages flow to those different areas.

At the moment that may be true but increasing the pool of potential labor rarely results in wealth distribution. I think companies will pay less. That money won't go to other hires as tech companies limit hiring for other reasons than money. The money will go to bottom lines, to stockholders: the opposite of wealth distribution.

If that value is going to be captured by anyone, I would much MUCH rather it be captured by Google shareholders, many of whom are employees and are at least partly responsible for the company's incredible success, than lazy and parasitic SFBA landlords who profit from their own NIMBYism and regulatory predation.

If you're working remotely for 100k, and paying 1.7k a month in rent, you're capturing ~80k as well. That means more capital is going to the employers(who saves 40k) at the expense of the landlords (who lose out on that 40k).

I honestly think I'd rather have the capital go to the employers because a) it improves my value in relation to them (I now can argue that I should get paid more, because I bring in 40k a year more value than I did in SV) AND I have a financial interest in the company doing well (with options/RSUs/bonuses/etc).

The money going to the landlords starts to become very literally "rent seeking" where they will capture the capital without providing any productivity gains in return. You could argue that their value in "provide a location for people to live so they can collaborate more effectively" is decreasing with remote work, and they will have to charge less because the value they provide is decreasing.

It most certainly is, if at the same time you're hanging out at city council meetings protesting construction and housing development. The cost of housing in SFBA isn't really the cost of land - its the cost of regulation. It's the marginal cost of building new housing.

Additionally, labor has a say in what they're paid as well and knowledge of what the average pay is for a given job in their country, region, or city. They can also talk to their fellow employees when they're hired and then push for a hire wage when they find out they're making less then everyone else doing the same job. Just because someone lives in Wisconsin doesn't mean they just accept any offer at a discount simply because HR has a bar chart says they should be paid 35% less then someone else.

1. Americans need to buy and hold equities. Period. When Google cuts costs or makes more money, I benefit as a shareholder (or you can hold total market indexes and the like).

2. Maybe the money will go to new hires, capabilities, expenditures, etc. ?

3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like.

4. Increase taxes on the wealthy, etc.

One arguing point I'd like to make though is that if this doesn't result in wealth redistribution (companies will pay less and this is fine) should we all begin moving to a few cities?

Not to mention, the top companies would still hire top talent in a competitive market.

The truth is, no matter where you are, talent knows what talent is worth. We price accordingly and in the end the market is stable at a certain price level.

We’ve been seeing this over the last decade in major US cities competing for SF-level talent. Tech is one of the highest paid professions. Remote or otherwise. To say companies will just go hire someone cheaper assumes they can find someone cheaper.

In the end I think the real winners are rural America (or Europe or where ever you live). Having a lifeblood of capital come back to small towns and the like will decentralize our cities, improve our quality of life, reinforce the need for infrastructure, and allow innovation to solve those problems.

Exciting times.

This is a pipe dream and quite conceited. Talent is worth what the market will pay for it. No escaping supply and demand. If you no longer need to be in the office, the labor pool is immensely expanded. Unless you think that all the smart people in the world were already working for SF employers.

And I don't think it's SV -> Rural America exclusively. Many of these jobs will filter back into medium to large sized metros across the country. Places like Columbus, Indianapolis, St Louis, Atlanta, Nashville, etc. . There are scores of talented developers in these areas that would be open to remote work, but not relocation to the major metro areas.

From what I can tell, people are actually mostly moving to other tech hubs (but lower priced) and to high end vacation areas. Think Austin, Denver, Park City Utah, Lake Tahoe, etc... The underlying dynamics are still at play (even tech but to a lesser extent).

It makes me uncomfortable to think tech population from Ca descending onto unsuspecting laid back mid western towns. Integration should be gentle and respectful and with consent.

>https://www.youtube.com/watch?v=eoUtoqeEw8U

you can excuse the resentment

I don’t have a comment or solution to this problem (is it even a problem?) otherwise I’d suggest something. I’m just observing like others, but I will admit to browsing Zillow for a farm if remote work has staying power. I think being able to provide some stimulus economically from this will help those smaller rural businesses. I don’t know. I’m not qualified in economics to predict the outcome, only some hope and some fear of possibilities.

You can hire competent Thai or Vietnamese programmers for $20K/year on Upwork, which is a princely sum in their countries. If all you want is someone to implement a spec, they'll do the job just as good or better than any American. Why would you pay $100K/year?

Most markets bifurcate into a commoditized low-end that makes all the volume and a differentiated high-end that makes all the profits. Think Android/iPhone, Windows/Mac, TSMC/Intel, Volkswagon/Porsche, etc. The commodity low-end programmer isn't the guy in Missouri, it's the guy in Minsk or Bangkok. You're either the one making up the specs (which will probably still be in Silicon Valley, because that requires communication and trust more than coding ability), or the one implementing the specs (which can be anywhere, with commensurate wages).

So it would follow that overpriced talent in high-demand markets would see a decrease, where underpriced talent in low-demand markets would see an increase.

This would be the same concerns with offshoring as well, but that hasn't led to massive salary drops. Because there's still a big cost to switching people. If you could fire all your SF SWEs today and replace them with identical, knowledgable, fully-ramped, culture-carried SWEs in $secondary_market for half price, you would. You can't, so you threaten and you try to convince your SF SWE that you could just enough to keep their expectations low, but not so much that they actually quit.

I see a lot of companies still trying the "CoLA trick" on employees moving to secondary markets. "We can hire your position in $market for cheaper," so the argument goes. The best move there is to call their bluff: "go do it then". Most people won't do it because a) conflict is hard and b) finding a new job on top of moving is annoying. So they'll take it on the chin and just resign 6-12 months later after they're settled.

[1] In the old world, there's still a premium to convince talent to relocate. So companies in high-demand markets (e.g., SF) either have to pay +x% to tap non-local talent and get them to move to the high-demand market (where they become local talent).

Even in the new world, non-local talent isn't going to sit by and let themselves be underpaid. "I'm doing the exact same thing, delivering the exact same value, but someone is getting paid 30% more to sit in the office? Oh, and you don't even pay for my home office?"

Anyone working for a Silicon Valley company as an engineer is almost certainly considered "the wealthy" by most of America.

Depending on your definition of wealthy, "anyone working" full stop. A large number of americans do not work (too young/old etc). Others are sick. Many at the top of society don't earn much income (tax voodoo). And automation is coming. If we define "wealthy" as the top 25/15/10% of wage earners, how soon before that is basically just anyone with a fulltime job?

In 2020, $121,411 was the median household net worth in the United States. This is up from $97,225.55 in 2017.

The average household net worth in 2020 was $746,821. It was $692,100 in 2017.

The disparity between these two numbers is itself a major problem, but not the point. If you have a net work of $120k you aren't wealthy, even if you earnt that all in the last month.

The way you get from having no wealth to having an average amount is by working harder and earning more. However the tax system is built to punish people who earn more money from work, and reward people who gain more wealth through things like capital gains -- you pay more tax if you increase your wealth by a dollar from working than from the side-effect of being already wealthy and seeing your assets gain value. You're also far more likely to have higher outgoings if you're working (higher cost to live near a high paying job, commuting costs etc)

If you are on the median ohio wage on 37k a year, so $30,427.47 net, and spending 37k to live, your wealth doesn't increase.

If you work an extra 1k, you take home $31,202.47 -- $775, 22.5% tax.

If you make 1k in capital gains, you keep $971, 3% tax.

Look at twice median wage of 74k a year. Take home 57,439.49. Extra $1k will give you 58,109.69, an extra $670 - 33% tax.

Make 1k in capital gains and you pay 18% tax.

Earn 10 times the median wage at $370k and you keep 239,713.20, 42% tax.

Get 1k in capital gains and you keep $764, 24% tax.

https://dqydj.com/average-median-top-net-worth-percentiles/

https://www.thebalance.com/breakdown-of-average-monthly-hous...

https://goodcalculators.com/us-salary-tax-calculator/ohio/

https://smartasset.com/investing/capital-gains-tax-calculato...

When you consider just how low US individual income tax rates are by global standards, it’s obvious that disparities in net worth have a lot to do with the fact that a large share of Americans, regardless of their income, effectively choose to live from paycheck to paycheck on the brink of personal insolvency.

But often these arguments don't present a full picture - because it only discusses the end result of the dollar received and compare the tax rates.

What about the risk? A job-income is 100% guaranteed to be received if one worked. Even if the business paying the said wage doesn't make a profit, they still have to pay the wage. The owner cops the loss.

Therefore, to encourage investments, the taxes are lowered on the profits of such type of investment (which is what capital gains are). The person trying to make capital gains income has to take on a risk that a wage earner doesn't, because the capital gains aren't guaranteed.

If capital gains are taxed the same, you will find that there will be less investments, which leads to less jobs and less wealth overall.

So you're saying people don't work because they are taxed at a higher rate than capital gains?

Higher capital gains tax discourages investment. If income tax is higher, it indeed does stop people from working (as much). But we are talking about raising capital gains tax, not raising income tax.

The person risking "billions" in capital is taking "billions" in monetary risk (the weighting depending on what the investment is - bonds are less risky than shares, for example).

Over the last 50 years the values of investments have far far outpaced growth in earnings. If a millionaire doesn't invest and make captial gains, what does he do with his money? Keep it in a box under the bed?

And a lawyer gets paid $200/hr. What are you comparing? I'm not talking about whether it's "fair" that someone can be earning so little when there exists billionairs. That's for the philosophers and social commentators to endless debate.

But someone working for $20/hr earns that money, with zero risk of not receiving it after services rendered. Someone investing money is not guaranteed a return.

> If a millionaire doesn't invest and make captial gains, what does he do with his money?

So you're saying that because said millionaire has "no choice", he would be forced to invest and thus, society could leech more off him?

Same principle with a lawyer being paid $200 an hour, or an actor on $2000 an hour.

Morally I'd say that the millionaire who is rent seeking should be taxed more than those working, but parity would be a start

You make investing seem like gambling. Seems that the IRS treat gambling as earned income, not unearned income.

Yes, but it is not good that your "compensation" will be coming from something that isn't tied to your job performance. Wages at least have some tenuous connection to how well you perform at work.

> 2. Maybe the money will go to new hires, capabilities, expenditures, etc. ?

Based on recent trends, this will not happen.

> 3. Sure, but this is certainly a good arguing point against immigration, population growth and H1-B visa programs and the like.

Yes, definitely.

> 4. Increase taxes on the wealthy, etc.

Yes, or nationalize the banks.

It also doesn't account for the fact that these equities can lose substantial value, or may be over-valued.

> Yes, or nationalize the banks.

Re-implement the Glass-Steagall Act, or similar. Nationalization leaves the levers of power in the hands of the wrong people. Keeping commercial and investment banking separate while implementing strong consumer protections was shown to work well in the past. Also, it has shown that the repeal massively reduced the amount of banks (killing competition) so it stands to reason that trend could be reversed and improve the consumer banking experience over time.

This won’t work. When the tech exodus begins, it’s going to cause CA to buckle at its knees because the wealthy has been subsidizing more than 80% of the population. It is not sustainable or healthy at all to suckle at the teat of the wealthy.

We should abolish all taxes and only retain taxes based on consumption. And a flat modest capital gains tax. With dedications gone, this might actually bring in more public money.

Public spending will also decrease if we figure a way out of unfunded pension liabilities. This is huge. Don’t know how it can be resolved.

CA does not tax wealth, they tax (predominately) income, and I wouldn't be so quick to equate the 2. Prop 13, for example, can mean that wealthy land owners pay almost nothing in tax if they've owned their property for a long time.

https://www.taxfairnessproject.org/ generally the wealthier you are the bigger your tax cut.

Yes, and I also see the push for remote work also affecting the demand side of the software labor market as well as the supply. There will be even more push for good collaboration/communication work process software. It's still a fast growing market.

I can tell you there's a reason I left Texas and it's because cash doesn't do to your savings what RSU's and bonuses will.

The talent isn't being converted from potential - as was recently said, "You can't be what you can't see".

I was in Kansas City meeting people in Jan and it's pretty clear that there's a lot of talent hiding out there in downtown Missouri.

The talent there tops out at SSE because there's no vertical space without jumping to management & two years down the folks know are "mid-west-nice" managers with an iron fist behind it.

Several people who should've chased down the principal engineer roles have become these sorts of managers who never made it to directors because they're always been better devs than they were managers. And this seemed twice as bad for the young uns to have a dev-heavy manager squash a few of their attempts to actually own decisions, instead of just proposing them & see that role as a way to get that ability.

Most folks though things would be different if they had moved to SFBA, but all of them hit this point when they already had kids in school with stable single-income households (house all paid for).

In fact, I'd be one of those people in Bangalore if I had a bit more skills as a manager (completely sucking at management is a good way to be forced to chase the dev side).

If they could hired as a principal dev via remote out of being promising senior se, then this process would actually convert a lot of the talent into actual productivity in the industry.

That was my experience at an F500 in the midwest. I wasn't a senior engineer but I was doing the same type of work as the seniors on my team. And I felt like my role could have more ownership. They did have team leads, a few architects, and agile related roles. But there wasn't much else for devs who didn't want to be managers.

My current company in the bay area is a lot better. I feel like I have more ownership, and the IC roles are more granular. I think technically senior can be terminal, and staff/principal roles here require influencing other teams. But my company has thought about promoting ICs, and I clearly see how staff/principals have a more challenging job.

Yes, the strong incentive is to stay put, stick to the local employer as long as you can and still get a role that pays more money. The skills you get from sticking around just make it harder to shift as well sometimes. The output gets equated to talent - "built my sixteenth monolith .NET CRUD web app" is not as well respected as it should be.

For example, there's folks in Portland who are looking at the Nike CEO situation with great trepidation - talented people who would do very well in a new job, assuming they don't need to move.

I think as an industry everyone is pushed towards software engineering and the large clouds have vacuumed up everyone worth their weight for operations. We make it happen but it’s so stressful because our team and workload balance is so far out of whack.

SWE get to work on new products and get career growth towards bigger and more interesting projects as reward for delivery

Of course people focus on where the opportunities are. It's not the fault of an individual company but an overall industry mindset. "Reward it or lose it" should be a mantra of availability in technical industry expertise.

The fact that some folks think so highly of themselves that they don't believe this to be true in their case is just hubris.

Or let's flip it around, move the same developer from Chicago to SF and they will suddenly make more money.

I can only imagine that cost of living is the main factor. Naturally there will be a tiny minority of truly brilliant builders and engineers, but we are not talking about them as they are outliers.

One is more likely to have more experience with startups/trendy new tech.

The other could probably work with it, but the other one already has.

The fact that everyone is remote is actually a great 'leveler', since the company has a 'main office' and a few satellite offices in other cities. I'm not affiliated with the 'main office', but I actually am concerned that I'll suffer career-wise once the company goes back to in-office, since I'll be in a satellite office missing out on casual-but-important lunch/coffee/hallway conversations.

So, from my perspective, it's a great time to change jobs. YMMV.

The reason they pay “SF wages” is because they can’t hire talent at other prices, not because of some goodness of the heart. While total talent pool might be slightly expanded with people who didn’t want to move to SF previously, overall it’s not going to be a big shift.

Bay area salaries are much larger than most other jobs (tech or not) in small cities. I recall local tech companies offering 1/2 to 1/3 of what you would get paid for average (non-FAANG) work in the Bay. In most smaller cities in the US > $100k is still quite a lot for a household, let alone a single income. If take that income outside of even small towns to more rural areas, $100k can allow you to live very, very well.

Sure eventually we'll see salaries reach an equilibrium, where local tech companies have to offer more and big tech companies will offer less. However, for the next few years, if you're coming from a Bay Area company, you can take a pretty major cut to TC and still live extremely well. You don't have to move to the middle of nowhere for this to be the case either.

At a million dollars you need a fairly large household income to afford luxuries beyond your house. Even putting down 25% on the house with a good 30 year fixed rate loan you'd be looking at just under $4k a month for your mortgage. After utilities you're easily over $4k a month. If you scrimped you could maybe keep your other household costs under $500 a month (realistically you're looking at $1k). So you're looking at a take-home of $4.5-5k to just stay afloat.

That's all for a shitty house that needs work, doesn't have great insulation, and doesn't have a lot of usable space. If you're 30 when you buy they place you only have to keep that income until you're 60 or hope that you build a ton of equity in the meantime and cash out.

That's the minimum for most of the SFBA. There's plenty of places with even more outrageous prices for shitty houses. To buy a house for not completely outrageous prices you need to go pretty far afield with hour plus commutes.

Treating yourself to ramen once a week is not a luxury.

This is more than accessible to tech workers at public companies. A 150k income is going to be ~7k a month after taxes. Tier one employers pay significantly more than that to new grads, and pretty much everyone reputable in the bay pays more than that to experienced people. So yeah, single income can absolutely afford a home.

Obviously someone with student loans can't do that as quickly, but otoh a dual income family could put $2M down in cash before they turn 30 given moderate success. (Or another way of looking at this is a moderately successful mid-20s SWE can bank 100k/yr after all expenses and retirement savings, without budgeting strictly. That's ridiculous)

A SWE in their 20s banking $100k a year? Must be nice.

Google, Amazon (and subsidiaries like Twitch), Microsoft (and subsidiaries like Github), Facebook, Linkedin, Stripe, Square, Lyft, Uber, Snap, Oracle, Apple, Dropbox, Box, Nvidia, Twitter, Slack, Salesforce, ByteDance and a slew of others. And I'm including only companies that pay out 150K in cash equivalents (cash + annual bonus + liquid stock) in that list.

After a promotion, that list probably doubles in size.

> What new grad making $150k is going to qualify for a loan on a million dollar house?

I don't think I ever suggested this. What I did suggest is that someone who graduates at 22 or 23 (and, with the big caveat that they do so with little to no existing debt), gets a 150K starting comp, and has even a modest amount of career growth will be able to save a whole bunch of money in their late twenties.

> A SWE in their 20s banking $100k a year? Must be nice.

Like I said, its absolutely ridiculous.

It would not surprise me at all if companies became more open to hiring remote employees, but started paying them 20% - 30% less, and extended the offer to transition to WFH (with a salary adjustment) for existing employees as well.

This isn't new, it's already been realized long ago. I've been working remote for ~10 years and there is always a location modifier in the salary.

Economies usually don't work like that.

Even if some version of that happens, it will still pay off to move out of SF.

I think one of the big problems in the US is that growth and wealth are concentrated to a few hyper rich coastal cities, where most people can't afford to move. While large parts of the country is relatively impoverished.

If that ends up being spread around more evenly, I think that's only good. Even if I personally might get a pay cut.

Now I do understand that of software people believe that programing is somehow special and can't be done in effective manner remotely or third world site at far lower cost.

I have few observations here:

1) With massive proliferation of frameworks the creative/ intellectual input is increasing minimal for most of commercial work. And that's where most of the software devs are employed.

2) A lot of work is low quality that companies do not care because same mentality of cheap use and throw stuff is prevailing now for enterprise apps as it is for consumer stuff.

3) Looking at lot of software produced by top valley companies is buggy, bloated and feels generally crappy. I do not believe all of it is just due to companies' strategy of being first to market. A lot of it seems because of same low quality CRUD peddlers who fill office floors of fortune 500 companies.

I've spent decades among software people and never heard this said.

The outsourcing to India etc is 2+ decades old already FFS! What impact it's had on US wages is hard to say, but it's been very good for a lot of third world engineers!

This statement can be generalized to:

"I think one of the big problems in the world is that growth and wealth are concentrated to a few hyper rich countries, where most people can't afford to move. While large parts of the world are relatively impoverished."

Remote companies that attempt to race for the bottom will be at a huge competitive disadvantage against remote companies that don't. Over time, they'll learn and adapt (or they'll die).

The biggest misconception about remote work is that remote work is good because don't have to pay bay area salaries. When you do that, you're broadening your talent pool, and you're then limiting yourself to the bottom half of it.

When you pay Silicon Valley salaries (or higher) for remote work, you broaden your talent pool to the entire world, and then you get to select from the very top tier. We've been doing this for years, now, and it still feels like an undiscovered gold mine hiding in plain sight.

Engineering throughput definitely doesn't scale linearly with the size of the engineering team. Good on you for never having managed to have heard of Fred Brooks though.

I think it's even worse than that. Once they realize that you're working from home, why wouldn't they hire someone much cheaper abroad?

I hope I'm wrong but I think in less than 5 years people will regret this WFH thing.

Maybe this time is different with the advent of better online collaboration tools. But these tools do little to help with real-time communication across time zones and language barriers.

It's great news for non-Americans though, USD goes a long way in a lot of the world.

Zoom hasn't fixed this.

My employer is becoming more WFH friendly. But they are explicitly saying post-covid fulltime remote will require an adjustment for base salary and future equity grants. I don't think that would be a good financial decision for me. Even if my compensation didn't get cut I would probably end up needing to take a pay cut or move if I wanted to change jobs.

Base salaries are pretty sticky downwards. It wouldn't be surprising to see modest formal geo-based adjustments of base salaries and much larger quiet adjustments of equity grants--which tend to be much less transparent. It will obviously vary by company but, to the degree in-office becomes largely optional, it's reasonable to expect comp tends towards something more equalized--at least within the US.

If only there was some kind of organization in which tech workers could "unify".

Businesses found it necessary to exist in Silicon Valley because it provided certain benefits, and businesses found it necessary to have on-premises employees because it provided certain benefits. Since California won't allow any on-premises anything, the cost-benefit of being in the Valley and having people in the office is being reset. But if your skills and aptitude are scarce, there's no reason to believe wages won't continue to reflect that. And if your skills and aptitude aren't scarce, you were overpaid in the first place.

I just know that the improved state of affairs has my wife and I dreaming of remote work in a rural area one day soon. Come on Starlink!