Honestly, recently moving to Seattle has been refreshing to me in this regard. I find Seattle tech industry pay no less than SF, plus no state income tax, and for the same rent as SF you can practically live like a king/queen here.
I wonder how long the housing situation in SV can keep up until everything collapses under its own weight?
Most engineers employed at Google (or any other company) in Silicon Valley have enough to rent or even buy houses. Actually, a lot of other workers who make one half (or even less) that salary manage as well.
People who choose to live in cars or on campus have something else going on with them. It's not just about money, most of us will always choose to have their own place, no matter how small, than living this kind of life.
I don't doubt what the Quora discussion describes happens, I'm just claiming these are very few and far between exceptions.
As a kid, I had a parent that worked at the Almaden IBM campus. The commute from the Livermore/Pleasanton area was about 40-50 minutes going over 84. Crazy how much worse traffic is now, I can't imagine making that drive daily now. They've been working on the the 237/Mission exits on 680 for nearly 20 years and it has only gotten worse.
Sounds like a good time to sell!
I guess keeping poor neighborhoods poor is a good think now?
"I'd definitely do it again..." and "I've always wanted to live out of a car, ever since my first station wagon..." are quotes in there.
I had the opportunity to get a job in Seattle at Amazon about 10 years ago. I would have taken a paycut, but with the 0% state income tax and with the generous signing bonus it would have more than made up the difference. (I'm pretty sure property taxes are higher though.)
But then I had to contemplate exchanging 300 days of sunshine for 200 days of rain. At the time, I was playing rollerhockey outdoors at 8pm and came to the conclusion that I just couldn't do it because of the weather. And I grew up in Vancouver, BC so the rain didn't bother me as much, but I just got too spoiled by the amazing Bay Area weather. If you're not used to it, the rain in the Pacific Northwest truly is relentless, so it takes getting used to.
Mind you that was during the time when rent prices were high but not as ludicrous like they are now. Even during the dotcom boom there were similar stories of people living in their vans, so it's not really a new story.
But my friend was charged 5100/month for a 2 bedroom at mission bay, which doesn't make sense. If I had to make the same choice now, it would be a lot harder to make and Seattle is definitely compelling if you can get past the 200 days of rain.
Then again, I'm "deep inside" Europe, so I have no idea how bad the weather over there really is.
The reason I chose to move back has more to do with the sheer amount of stuff to do. And the good food :)
Plus, your ocean is too damn cold. :P
It also encourages getting up and taking walks every now and then, which has various benefits (both mental and physical).
I lived in Seattle for six years. The environment is gorgeous. Lots of trails for hiking, ton of greenery... the thing is though, the weather made me not want to go out. And that can be horribly depressing.
And many of those "indoor" work spaces try as hard as possible to have natural light.
I would hope not, if we want to stay healthy.
Google's a good example. They have offices all over. They have clients everywhere.
Common sense would dictate that employees would be easier to hire for the same cost elsewhere where that salary affords a better lifestyle. With all due respect to SF (last time I visited I was 12), there are lots of places where a $140k salary will get you the best schools for kids, entertainment for the adults and palatial digs. It is quite literally like doubling you salary to take it someplace else, even within the US.
I wonder what the reasons are. Obviously clusters matter. There's the tautology that everyone wants what everyone wants. Being someplace vibrant and affluent is valuable to the resident & employees (or resident-employees). I also think that nominal salaries are important to people's decision making. A 25% pay cut from relocation resulting in a 10% cut in after tax salary but a real measurable and provable increase in purchasing power still feels like a 25% pay cut.
Obvious'y this doesn't happen even though a simple common sense "story" suggests that it should. Hence unintuitive.
I'm not saying that individuals don't have their reasons for doing what they do, that's not the interesting part. It's interesting that we don't see digitization and globalization take the pressure off high rent areas and encourage a migration of firms and employees to lower rent (for equivalent of better quality of life) areas at a systemic level.
Corporations generally locate the highest-priority projects in the head office to minimize communication costs. The executives are at the head offices, the largest concentration of staff is there, and you can pick the top employees from a larger pool. That means that if you're an ambitious young professional, you go to where the highest-priority projects are, because they will benefit your career the most in the future. This further reinforces the need to locate high-priority projects at headquarters.
I saw this play out at Google. The most ambitious, career-oriented young employees would move from NYC, Pittsburgh, or Boston to work in Mountain View, where they could have their pick of projects. Meanwhile, more family-oriented employees would move from Mountain View to Pittsburgh, Michigan, etc. to enjoy a higher standard of living and be closer to family. Who gets promoted with a big raise? The folks who work on the highest-priority projects. What does that do to area rents? It makes them rise in line with the highest-paid employees in that area.
You might ask why corporations don't move their whole headquarters to another location. Some do - Wells Fargo moved most of its operations from San Francisco to Minneapolis in search of cheaper labor. However, the same dynamic between employees within a company also plays out between companies within an industry. Google can't move its headquarters and operations because most of the interesting developments in the tech industry - startups to buy, startups to fund, new technologies to keep up with, key employees to hire - are in the Bay Area, and moving to say, Detroit means that they'll miss out on the cross-pollination of ideas that keeps them relevant in their industry. Note that this is not a serious issue for Wells Fargo, whose entire brand is based on "We're stolid and conservative, and we may not be in the forefront of financial innovation, but we will keep your money safe."
This dynamic played out a hundred years ago too - Detroit became Motown, USA because everyone involved in automobile manufacture was incentivized to move there, Hollywood became Hollywood because everyone in the film industry was incentivized to move there, etc. When those industries were vital and growing, they faced the same pressure on rents and economics as the Bay Area does today.
1. There are synergies to having much of the staff working together at the same place. And the only place an employer the size of Google can find enough staff who are up to Google standards is the Valley.
2. Once you get to the Valley, anywhere else is cottage country. Google is by necessity somewhat geographically distributed, but its senior management is completely centralized. Last I checked, all the SVPs were in Mountain View. It's easy to mistake the best place for the only place.
3. Google started in the Valley and grew up there. Moving their main operation anywhere else would be very disruptive. Getting employees to move is hard at the best of times; getting highly sought-after engineers to move away from the center of their profession, where they have many many options should they decide to stay, would be brutal.
Because they could open offices in city X and pay smaller salaries in absolute value, though equivalent relative to living costs, and get the same hires for less money. I don't see the paradox here; you could phrase it as a question: why should blubsoft or blub.ly pay more for something, when they can pay less and still get it.
Why are they there, paying high salaries if they could be getting the same for less elsewhere?
Maybe they're concerned about lead times for hiring new people (stealing someone from a competitor vs all new employees needing to move first)?
Supposedly one of the reasons that Silicon Valley did so well, is that California doesn't allow non-compete agreements. Perhaps there's actually some benefit to exchanging employees with your competitors more often? (But then, what about the no-poaching agreements that companies were getting sued over recently?)
Maybe they're concerned that being the only shop in town would make managers more reluctant to fire people who need it (does corporate location preference correlate to corporate culture regarding expected length of service)?
Maybe having offices in less expensive locations hurts the company image (for customers, or potential employees, or both) enough that the extra salary cost is worth it?
Similarly, technological developments that benefit everyone in the industry are good for the industry as a whole, but bad for each individual firm in the industry, which now face increased competition. That's why big companies often try to spread FUD around "open" alternatives to their core business.
Maybe it's because they can't get the same for less elsewhere
Granted the concentration is likely to be higher in the Valley, but it's not that much higher. Then there is the argument that "if you build it, they will come."
I'm on the job hunt now and hiring is still a huge mess as it ever was.
He talks about why things have not gone 'flat'.
Does he have an interesting reason why not?
It's been a while since I read it, but I didn't think it was all that revolutionary... it just mostly made sense.
I've known quite a few people who have lived exactly like this for a while. You know what? None are from Silicon Valley and are all from different walks of life. You have your people who ended up in difficult situations, people strapped for cash, people who were ultra minimalist, people who were looking for adventure, people who didn't want to be tied down, people looking to save up money for a couple years. None had Google's perks/free meals. All different motivations. Some by choice, some not.
To generalize that Silicon Valley is somehow responsible from one article about one subset of people is disingenuous.
There's a reason those trains to CT are so full of people every night.
Anecdotally I've been hearing more Valley-style anti-tech sentiment coming out of Seattle lately. If not careful Seattle can just as easily turn into the same us vs. them, haves vs. have-nots story of San Francisco.
It'll just be the MS Connector instead of the Google Bus instead.
There is a push afoot to get Google (and then by reaction everyone) to treat the perks they give as taxable income. I expect it is being "encouraged" by companies that don't want to pay for that kind of thing as a way of killing it. Unfortunately if they are successful I expect it to backfire, Google to continue to do it and to cover the tax aspects and the other companies being forced to follow suit.
The census arrived at a different conclusion.
edit: Engineering talent at AmaGooBookSoft are sometimes given pay in Seattle that is comparable to SF, however.
it has already couple times at least during my time here - since 2000 - only to emerge with higher rents and higher real estate prices. Buying is the best solution for your own housing - it moves your onto the other side of the wave where you just enjoy the ride (and yes, i've been under water, didn't care as i bought to live in it, not to speculate)
Is the problem mentioned in the post, typically, relevant to singles?