
Silicon Valley wages have dropped for non-tech jobs - Futurebot
https://www.mercurynews.com/2018/11/18/silicon-valley-wages-have-dropped-for-all-except-highest-paying-jobs-report/
======
yjhoney
I started a nonprofit 2 years ago (garagescript.org) that hires low income
people in San Jose and their full time job is to learn how to code and teach
new students.

Our nonprofit started off with 20 students, most were making about 25k/year
and had no coding experience. I paid each of them 2k / month to quit their
jobs and focus on coding full time.

From the original 20 students, 6 are left. The other 14 are all full-stack
software engineers.

If anyone wants to help out, send me an email to song at garagescript.org. I
believe the real long term solution is to train under-served communities
better and help them acquire technical skills.

 _edit_ remove donation link.

~~~
space_fountain
First thanks for what you're doing. I think it's definitely part of the
solution. My worry though is that I don't think everyone is equipped to be a
programer. The thing I keep coming back to is my younger brother. He's got
mental disabilities which mean he can't read or do math at more than a very
basic level (first grade maybe) and for what ever it's worth he also scored
pretty low on IQ tests. Despite a bit of a falling out he's working in
construction and doing fine, but he could never go into a highly skilled
occupation. There's plenty of people like him some not nearly on such an
extreme who would have been perfectly capable of working in management or
similar, but as we require more and more training for simple jobs I worry that
we loose places for people who can't keep up

~~~
Scipio_Afri
Replying so that the other person pleading for skepticism in this thread, and
myself, can be seen near the top. This non-profit is not vetted, has a very
basic website, has no proof of the students, this persons account is 24 days
old.

Please be mindful that while this all sounds like a great idea and I hope it
really exists, this also could be a scam as there is no evidence or any 3rd
party that this is a real nonprofit which has been paying 20 people 2k a month
to learn to code.

Please don't donate until you're sure this person is using the money as they
claim. Attempting to verify their website and facebook leads to some red flags
- no pictures of events, just events on facebook with 1 or 2 people attending,
no documented proof of the 16 people who are full stack developers. If the
non-profit is successful as they've said it is, then if he doesn't want to
burn through his own savings (again supposedly) then he needs to seriously do
better marketing and proof. Even with those things, I'd be skeptical unless it
was independently verified.

~~~
yjhoney
Thanks for reminding people be aware. Fundraising wasn't the point of my
original comment, so I took out the donation link. My focus primarily has been
to teach students, so I haven't had time to update any of the social media or
the landing page.

I lost the pw to my original account on HN, but here's my username:
[https://news.ycombinator.com/user?id=songzme](https://news.ycombinator.com/user?id=songzme)

~~~
ma2rten
Here is a link to your previous post about it:
[https://news.ycombinator.com/item?id=16043552](https://news.ycombinator.com/item?id=16043552)

------
CydeWeys
I have when the news writes an entire article around a single report, but then
fails to link to that report. You had one job ...

Anyway, here's the report in question: [http://www.everettprogram.org/main/wp-
content/uploads/TIGHTR...](http://www.everettprogram.org/main/wp-
content/uploads/TIGHTROPE-2018-REPORT.pdf)

Reading the fine details of the report, you see that the top-line metric is
real income, adjusted for inflation and local cost of living. And the #1
factor that's proved ruinous to local cost of living in the Bay Area these
past two decades is of course housing prices. If zoning restrictions were
relaxed and more housing was allowed to be built, costs would be reduced and a
lot of these problems would be solved. The Bay Area has a critical lack of
housing, which is driving all these prices up and causing most of the decline
in CoL-adjusted non-tech wages.

~~~
dublidu
If only we could aloe property assessments to increase with a local cost of
living index, we would at least have enough property tax revenue to pay
teachers.

~~~
pm90
I think we should be careful with this. Currently, because of the frozen
property tax law, many houses worth millions pay very little in property
taxes; if they did have to pay taxes on the millions of dollars their property
is worth, they would have had to sell their houses ages ago. This would have
likely created a downward pressure on the prices; making it unlikely that the
home prices would reach the levels they are now.

All of which to say that assessing the property tax on the current market
value of all those properties isn't an accurate number; there is no way there
are so many people making that much money living in California.

~~~
slededit
Given the scale the only sane way to unwind it is to grandfather all sales
before a certain date. Otherwise you’ll have masses of people forced out of
their properties and chaos.

~~~
pm90
I mean, there are many solutions to this which aren't an immediate hike in
property taxes which would cause much market disruption. But its important to
acknowledge that the California Housing market is indeed a market distortion
on an Epic Scale. There is just no way that everyone can get the prices
they're asking for. And this is perhaps the major reason why I won't
personally invest in the CA housing market even though I love the state
otherwise.

------
lupire
The author almost noticed Simpson's paradox:

> Surprisingly, the UC Santa Cruz study suggests that employment in low wage
> industries is growing. The share of worker in jobs considered low-wage in
> 1997 grew 25 percent over the next 20 years, while the percent working in
> middle- and high-wage jobs declined.

The problem isn't that wages are dropping for certain work; the problem is
that middle-wage jobs are being automated away, leaving only low-skill but
non-automatable jobs that require organically-optimized things that all people
have but machines don't, like fingers and eyes.

~~~
Barrin92
the jobs that are mentioned in the article that are being hit the hardest are
teachers, firefighters, caretakers and so forth. How many of those have been
automated away?

It seems that tech workers in the valley have found their own analog to
blaming immigrants for downward wage pressure, their particular boogeyman
seems to be the robots.

No, the answer is much more trivial. As the article points out, the huge
influx of capital in the area is being returned only to the tech sector, who
merrily spend it and drive up the cost of living. The machines are not to
blame for this one.

~~~
empath75
I think there’s a step missing in the analysis there. If tech workers are
spending all this money — what are they spending it _on_? If they’re spending
it locally shouldn’t that increase wages locally?

~~~
burlesona
No. They’re spending it all on housing.

To be clear the flow is: tech companies make enormous revenue but require high
skill workers. To make this work they pay whatever it costs to get workers and
no more - in this case that means just enough to offset the enormous cost of
housing.

Since the baby boomers practically banned all housing development in the bay
once their little burns were built, this result in a little see-saw battle
where landlords raise the rent until tech companies are forced to raise wages,
back and forth. Employees are left with an equation that looks basically like:
enormous salary - obscene rent = just a bit more cash flow than you’d earn in
software anywhere else.

Thus the flow of capital is from tech companies to landlords, in an arms race
that will only end when the landlords have taken so much of the capital out of
tech that the industry sputters and moves away.

~~~
orangecat
_Employees are left with an equation that looks basically like: enormous
salary - obscene rent = just a bit more cash flow than you’d earn in software
anywhere else._

It's probably true that the cost of minimally acceptable housing drives entry
level tech salaries, but they go way up from there. A senior SWE at Google
with salary+bonus+stock of $300k/year has a whole lot of disposable income
even after the ridiculous housing expenses.

~~~
solidsnack9000
There are very few senior SWEs at Google, relative to tech employees as a
whole.

------
deanmoriarty
How about:

1) Introducing a much higher tax rate for rental property income.

2) Making property taxes be reassessed every single year unless your AGI is
lower than average and you are a resident.

3) Introducing a much (much!) higher tax for non-residents/foreign investors
who buy a house purely for investment, and sometimes they don't even rent it
out (I know a few rich folks from FAANG who bought a handful of houses in MV,
and they keep them empty because they don't want the trouble of dealing with
tenants, they say the appreciation is more than enough, to me it's borderline
criminal).

I've seen numerous instances of those three events playing out against normal
people trying to afford some housing while working a normal job. If it's not
obvious, I'm heavily biased against real estate investors, because housing is
a need for everybody, so the market should be much more regulated.

~~~
woah
My guess is that while your anecdote may infuriate you, the effect of
investors who don’t rent out their homes is negligible on housing prices. The
real fix is to build enough housing for everyone. Eliminating prop 13 could
help with this, since it would cause homeowners to be penalized for high home
values, building political will to build more housing and bring down the
prices.

~~~
rrcaptain
>My guess is that while your anecdote may infuriate you, the effect of
investors who don’t rent out their homes is negligible on housing prices.

No that's actually a large part of housing problems. Like a third of Manhattan
real estate is empty. And Manhattan is already super dense but still has
homeless people.

~~~
CydeWeys
Please don't make up fake stats.

I live in Manhattan and the idea that a full third of the real estate here is
empty is laughable. Have you ever visited??

As my sibling comment points out, the real rate (as determined by actual data)
is less than 5%.

~~~
kokokokoko
I think you might be confusing rental property that is unrented vs property
that is not in the market but not physically occupied.

"about 30 percent of the more than 5,000 apartments are routinely vacant for
more than 10 months a year" [1]

[1] [https://www.nytimes.com/2011/07/07/nyregion/more-
apartments-...](https://www.nytimes.com/2011/07/07/nyregion/more-apartments-
are-empty-yet-rented-or-owned-census-finds.html)

~~~
AWS_IAM_AMA
I'm sure the parent commenter meant to use "please" in that manner, as the
stats are being used in a deliberately misleading manner.

Even your source shows it... that's 30 percent of a small (presumably
affluent) section of the city, not of the whole city. There are some 2.5
million apartments in the city, and this is talking about just 5k.

There are other sources that cite the actual percentage as 11% [1]. That's
still high, unfair to residents, and worth discussing, but you can't win
arguments by putting up fake stats.

[1] [https://www.6sqft.com/nearly-250000-nyc-rental-apartments-
si...](https://www.6sqft.com/nearly-250000-nyc-rental-apartments-sit-vacant/)

------
kuyaab
It’s incredible how hard it’s been for retail and service companies to recruit
lower-wage workers her in the South Bay. Mike Rowe and tech execs love to talk
about skills gaps, but the fact is most jobs aren’t filled because the
compensation these positions offer is garbage.

~~~
claydavisss
They're trapped - probably unable to even scrape together the money to move.
Moving is expensive! You need the money not only to relocate, but also to tide
you over until you find work. Casual mobility is for the wealthy.

~~~
bredren
It isn't just that, many low wage people have their families there. Sometimes
extended family. Moving would mean moving the whole clan away from friends and
their connections and where they grew up. Moving is not a small thing.

~~~
dabockster
Exactly this. Moving elsewhere when your extended family has lived in one
place for multiple generations is probably one of the largest risks a person
can take. You’re essentially trading most or all of your network for the
possibility of a better life. If the possibility doesn’t work out, the person
is usually worse off than if had they stayed in their original location.

------
imagetic
As someone who lives in the outer bay area, pay for jobs hasn't really gone up
at all in the last 8 years, but the tech industry has really pushed the cost
of living up a lot. I can't say I've noticed a drop in pay outside of the
media industry since that's what I work in. And a lot of that has to do with
the cost of gear now and the supply is so high buy the demand hasn't grown
that much.

Most of my neighbors are contractors / construction workers. Nobody I know can
fathom buying a home. But until last year things were fairly stagnant for
them. There is a lot more construction going on now, but it's mostly to turn
homes we can't afford into vacation rentals.

~~~
mlindner
This is because zoning laws largely prevent additional housing construction.
Converting existing housing isn't blocked however so converting them to
vacation rentals makes sense economically.

------
ummonk
One thing I've noticed is that aside from rent, random expenses in NYC are so
much more expensive. E.g. classpass classes, restaurants, etc. Do service
workers get better paid there?

------
helen___keller
Zoning law and housing code were enacted across the nation in response to the
crowded, unsanitary, and unsafe tenements of the industrial revolution. But,
we’ve gone too far and allowed too much local control of housing. Now in 21st
century American boomtowns, you can’t convert your single family into a duplex
or small apartment building, you can’t convert the first floor of your
building into a small business, you can’t have organic growth in your city the
way cities had grown up until the early 20th century. Far from just outlawing
tenements, we’ve outlawed our cities from adapting to change, which is why we
see such absurdities as in the bay areas cost of living.

For decades now we’ve been surviving off technical debt. Cars and roads allow
us to survive even when our cities are absurdly inefficiently organized. But
as the nation changes more and more, our top cities’ roads and street layouts
don’t adapt to the change, so we have unbearable traffic in every major city.
On top of that, we continue to ignore the needs of a more efficient method of
organizing ourselves - relaxing zoning to allow organic growth in the city,
and construction of mass transit between the dense regions that develop under
this system.

That’s how we developed cities before we started relying on cars, and what we
need to do to continue scaling American cities. Or we can just accept as every
house in the Bay Area reaches multimillion dollar price tag.

------
Aeolun
Isn’t it ironic that the rates of poverty are increasing in possibly the
wealthiest region in the world?

~~~
clubm8
> Isn’t it ironic that the rates of poverty are increasing in possibly the
> wealthiest region in the world?

Not really - a natural side effect of corporations not paying their fair share
in taxes, alongside employees who are compensated in ways (stock options)
where large chunks of their salary are untaxable by local governments.

(It's my understanding it's much harder for local governments to tax stock
options as capital gains go to feds, please correct me if I'm mistaken)

~~~
GeneralMayhem
That's half true at best.

Capital gains are reported on your tax return as a form of income. The rate at
which they're taxed is up to each jurisdiction. For federal taxes, long-term
capital gains happen to be taxed at a lower rate than other income. For
California state taxes, there is no such distinction - all income, including
capital gains, is taxed on the same progressive taxation schedule. So for
Californians, getting paid in stock options usually results in lower federal
taxes, but no change in state taxes.

Now, where it gets interesting is with local jurisdictions. In California,
cities and counties are not allowed to collect income taxes. However, San
Francisco does collect _payroll_ taxes. Paying your employees in options could
reduce the amount that counts as payroll, but only if the stock options are
increasing in value quickly. If your employees are getting all of their money
from you, the city gets its cut. If your employees are getting some of their
money from you and some from the stock market, then the city loses out on the
latter portion - but most employees should consider that a bonus and negotiate
pay primarily based on current value, so that shouldn't matter too much in the
long run.

What the city (but not the state!) definitely misses out on taxing is capital
gains on wealth already accrued. When I make money on investments (not so much
this year, but hypothetically), the city doesn't get anything from that,
because there's no payroll involved. The feds get some of it (at the reduced
capital gains rates, assuming I've held for a year); California gets some of
it (at the full income tax rate); San Francisco gets none. But again, that
story is only for investment income on money I already had, not for new stock
compensation.

------
mlindner
Silicon Valley has a multi-fold problem.

1\. Housing is expensive because of the influx of people immigrating to the
state from out of state and also out of country. (I'm one of them.) This
causes a housing shortage which will naturally drive up price of housing.

2\. The housing prices don't come down because California in general has very
restrictive zoning laws, especially in the most expensive areas, that prevent
building of sufficient housing density to cover demand. This in turn drives
housing development further outside of the bay area forcing long commute times
and highway usage.

3\. Because of the high cost of living (primarily from housing, food/etc is
not significantly more expensive) from the above problems the solution
proposed is to greatly raise the minimum wage, now hitting $15 in many areas.
This causes a drive to automate away simpler jobs (also providing an entry for
further tech startups to automate these things) or more commonly, move the
jobs out of the state via company acquisition followed by moving the
administrative jobs to company headquarters located out of state or sometimes
out of country. A high minimum wage reduces the available job market by
putting an artificial job supply limit in place thus causing unemployment for
these simpler jobs.

4\. On top of this there's a loophole for illegal immigrants where companies
abuse them by paying them below minimum wage because they are here illegally.
(Another reason that giving a path to legal immigration for illegal immigrants
would help things.)

The first thing and most important thing that needs to happen is for the state
to overrule local zoning laws (as opposed by the NIMBYs) and force generic
zoning, allowing unrestricted housing development. Just look at the south bay
area. The zoning is obvious even looking at satellite maps. Industrial areas
are kept separate from housing which are kept separate from retail. This
prevents natural intermixing of these causing a lot of need for road
development to allow people to travel between these blocks rather than walking
down the street.

~~~
humanrebar
> ...giving a path to legal immigration for illegal immigrants would help
> things.

I would rather consider paying _anyone_ below minimum wage a form of wage
theft and prosecutable as a criminal offense. Dunno why embezzlement is a
felony but breaking the law to underpay people is just grounds for a lawsuit.

~~~
jldugger
It's difficult to prosecute considering the employee risks deportation if they
report.

~~~
humanrebar
Still seems more likely than an undocumented person filing a lawsuit.

------
cutler
This is the real truth about the tech boom - how it impacts society as a whole
and who benefits. A nation's progress is measured by the standard of living of
the average citizen, not the elite. By that yardstick the so-called advanced
nations such as the UK and USA, with their spiralling housing costs, are
moving backwards not forwards.

------
ReptileMan
This looks like the run of the mill hollowing of the middle that has been
going on since the late 70s.

------
Scipio_Afri
Boost the wage floor. High skilled workers have more force to push against the
wage supply price that employers set; they have a lot of power to set wages,
including an entire department called HR dedicated to ensuring they get the
best deal as they can. Low wage employees do not have that power.

~~~
mlindner
The wage floor has been continuously getting raised. Many areas of California
have the highest minimum wage laws in the country. That isn't going to solve
the problem.

~~~
Scipio_Afri
Adjusted for inflation its lower than it was in the 1960's

------
crankylinuxuser
Surprised? I'm not. Capitalists are well known to conspire together and create
capitalist unions to block workers of all stripes.

[https://www.nytimes.com/2015/01/15/technology/silicon-
valley...](https://www.nytimes.com/2015/01/15/technology/silicon-valley-
antitrust-case-settlement-poaching-engineers.html)

Google, Apple, Intel and Adobe in this one....

[https://en.wikipedia.org/wiki/High-
Tech_Employee_Antitrust_L...](https://en.wikipedia.org/wiki/High-
Tech_Employee_Antitrust_Litigation)

Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay here.

[https://www.morganlewis.com/pubs/ftc-brings-first-wage-
fixin...](https://www.morganlewis.com/pubs/ftc-brings-first-wage-fixing-
enforcement-action-following-joint-doj-ftc-human-resources-guidance)

~~~
hazz99
Edit: I'm not a mod, nor trying to masquerade as one.

> Please don't use Hacker News primarily for political or ideological battle.
> This destroys intellectual curiosity [0]

Please keep your ideological battles away from HN.

[0]
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
tomcam
Sticking up for my ideological opposite crankylinuxuser again. HN is
constantly used for political and ideological battle. Why is crankylinuxuser's
different?

~~~
hazz99
Disclaimer: I'm not a mod, so you don't have to listen to my opinion.

This article is about low-skill workers, and has nothing to do with tech
companies being against unions.

But, it could simply be a tangential discussion, and those are often
interesting! My main concern was the

    
    
        Capitalists are well known to conspire together and create capitalist unions to block workers of all stripes.
    

generalization, which turned a potentially interesting discussion of tech
unions into an "capitalism vs. xyz" ideological battle.

~~~
crankylinuxuser
> Disclaimer: I'm not a mod, so you don't have to listen to my opinion.

So... You're masquerading as a HN mod? Damn.

Now, that seems like a bannable offense.

~~~
hazz99
I'm not trying to masquerade as a mod, I'm trying to gently suggest that
ideological battles be fought elsewhere, and for us to focus on the discussion
itself (tech unions).

I've edited my first comment to make it more apparent - I thought that sort of
comment was a common thing, but perhaps I'm wrong.

------
kumarm
Call any service business from top list on Yelp (Handyman, Dryer Vent
Cleaning, Plumber etc), they would charge minimum 80$ (Irrespective of whether
they do work or not).

Where is this money going?

~~~
itomato
Time spent sitting in traffic?

