I loved this line from the article "With unsolved US VISA problems for STEM workers, IT companies might have to get creative to hire potential employees." -- Yeah, creative...like paying a living wage for the location. Pay salaries that will allow someone to rent their own 1B (not bunking) and the "shortage" will magically disappear.
Yep, the tired old "Shortage of Engineers" meme is bound to come up in any discussion about tech hiring that ignores compensation. Saying there is a shortage of something in a market only makes sense given a price. Sure, there is probably a shortage of Bay Area engineers if you're paying $70K, but I bet there is no shortage if you're paying $400K.
I agree with everything you say about the economics of the situation, but ours is the omly industry I know of where inability to make enough money to pay for a sufficient workforce translates into a workforce shortage. A cattle rancher isn't going to compalain about a "ranchhand shortage" if she can't afford to pay enough to attract them.
It is not. The rancher would just hire an illegal immigrant often and it happens all the time on farms and restaurants. It doesn't fly in office environments and in positions where the salary cant just disappear in the books.
Secondly, only the technology industry has a massive pipeline of overseas workers available...so naturally there is constantly a "shortage" as a means to increase the pipeline of overseas workers.
I'm not saying NOT to hire overseas workers. I'm saying to be honest about it. Say -- we refuse to pay market wages and would rather that new graduates not find work than pay them a living wage for the Bay Area, instead we'll hire offshore workers desperate to flee their countries and willing to shack up 3 to a studio apartment.
The whole thing is based on unrealistic expectations. People work somewhere in the Bay Area, or launch a startup there; it's one of the most expensive areas in the country, maybe the world. Then they don't want to pay enough so that there is no shortage of employees.
So then the talk turns to bringing in H1Bs who will work for the low end of the "prevailing" (Ha!) salary.
Why don't these companies cut to the chase and just open an office in India? Or have the entire operation there?
Or are some of them actually not trying to change the world by delivering better toast to your door, and they just want to live in the Bay Area?
It's a form of off shoring. They create a fake shortage, lobby for more H1Bs, pay the national average for fair market, which is laughably low for the Bay Area, and there you have it. The tech shortage sponsored by Facebook...
This is untrue in my experience as the equivalent in an office environment to hiring an illegal immigrant would be subcontracting a 'job' to either a staffing agency whose H1B employees get paid piecemeal and billed out for different amounts. I've also worked with independent contractors who if you added up their low pay on the level, wouldn't be making adequate pay.
Heck, I've worked contract jobs through staffing agencies trying to make end meets and had the job location charge for parking which would be reimbursed 3 months later. Good luck getting ur money if you are working the next job and can't afford the time to follow up for that check.
There are plenty of ways companies dance around the same entity of illegal immigrant wages.
The system of usury against land ensures that land costs adapt to absorb all available income after food/clothing/energy costs have been accounted for.
Why is silicon valley more expensive to rent in? Because people came with money and the banks agreed to loan at a multiple of the new wage ceiling.
If wages increase x4 guess what will happen?
We need to stop banks creating debt to issue against land otherwise it will always absorb all income. And therefore all productivity gains flow to the land owner.
Bay area is infamous for many housing supply constraints in regulations. As far as loans increasing the demand side, banks can be pretty strict with %20 down payment restrictions. Which is why once houses go out of the dual income high earner price range ($1-1.5 million), you start seeing it overflow to other less desirable regions in the bay area.
Which given that land is limited (you can only go so far out before you are in another place) then the price of the building will increase. It is possible to end up in a situation where even very wealthy workers cannot afford to rent within hours of a city. Sydney, Melbourne, London and Vancouver are examples where this is starting to happen.
it has not happened yet but it is certainly pricing many out at lower ends of the income scale.
Because supply and demand. High salaries attract a lot of people to the bay and communities systematically refuse to build new housing to meet the demand so the price goes up.
You can do whatever you want to the banks but that won't change the fundamental of 2X people trying to live in X houses.
No, many hot-spots have large rentier presence including people "owning" and renting out multiple residencies which causes huge supply pressure.
Credit also typically increases ahead of wages which squeezes people further.
This isn't supply of people vs supply of homes, this is supply of credit. If you neutralise this you will see prices fall and be paying less of your labour to banks.
2008 - the credit taps ran dry => huge crash. Before that near unlimited credit saw land prices increase hugely. Neither on the up or the down did we see wages have such volatility.
I don't know why it is outrageous to say the solution to high rent is to build more.
We shouldn't worry about "squeezing" people out. Ours is a HUGE nation. We have A LOT of natural resources and there is no reason why we can't let people build more (outside of protected areas, of course).
People who are "priced out" should move to places where rent costs less. I keep hearing about property owners having enough political clout to block further development, depressing supply. They placate existing residents with tiny portions of rent-controlled apartments.
I fail to see how "gentrification" is a problem at all in the bigger scheme of things.
I don't think people renting out more places is a problem. If landlords hold supply out of the market to prop up prices, we can discourage such actions with a more dynamic property tax that places a realistic tax burden on under occupied or unoccupied property.
All that being said, we definitely need to figure out some way to peoperly educate people about personal finance.
I'm not arguing not to build more I'm simply arguing with the notion that the main problem is one of supply and demand. It is not, there are other problems in the mix including taxing labour not land.
> there are other problems in the mix including taxing labour not land
I agree to some extent. Property (land) taxes have to be high enough to discourage people from leaving it unused. I have no problems with fully replacing personal income tax but I'm not an expert and I have no idea if we can realistically raise the same tax revenue from land tax alone.
>> People who are "priced out" should move to places where rent costs less
It is a huge nation, but one where 70% of the tech jobs are stuck in SF/SV. I can move to Lincoln Nebraska and pay $400/mo in rent, but I sure as heck wont find an employer seeking a python job.
Clearly people are where the jobs are and price pressures respond accordingly. What fuels those price pressures are, IMHO:
1. banks creating near unlimited credit against land which at best eclipses productivity gains leaving workers no better off and rentiers collecting all the gains
2. the rest of the population working out that the game is rigged and piling into real-estate speculation as the only game in town.
I'd have expected someone in a country with a crippling house price bubble in many cities to get this.
Rents can only increase if the supply is limited compared to the demand. Anything that decreases supply why demand is high will only increase prices. The solution is to either increase supply or decrease demand for housing.
I guess they didn't get the memo on this in all the pre 2008 countries where supply was being added like crazy and so was credit and prices rose before a huge crash.
It's very naive to think that this is simply any one factor, especially supply and demand alone.
The complication with the supply/demand story is speculation. What happened pre-2008 was demand was artificially boosted by speculators (i.e. a bubble). The true demand for housing didn’t change much, but the speculative demand for housing driven by rising prices and cheap money increased massively. The downside of all speculative bubbles is when they pop.
The best way to avoid speculative run ups in prices (and subsequent crashes) is effective taxation. Of course taxation of land is not popular with the rich and powerful as it can’t be avoid.
Exactly. Forcing supply below demand through zoning restrictions does help, but once speculation begins this hurts supply also.
It amazes me on HN where on most other complex behavioural problems if someone came along and shouted "it's because of X" they would be laughed out to cries of "it's more complicated than just one thing".
Yet when it comes to millions of people with varying priorities interacting with government and the banks anyone who comes up with anything more complex than "it's supply and demand" is told "no, I've done econ 101 thank you".
Hacker news can't be bothered with Georgism, they've done econ 101 syllabus (provided by their establishment).
Not at all. We know in hindsight that the pre-2008 run up in prices was a bubble, but at the time this was debatable. I am just trying to explain to the OP that prices are set by supply and demand, but that demand may not always be rational.
Personally I do think it is a good idea to try and avoid speculative bubbles in assets and the best way to do this is via taxation.
Markets can stay irrational for a while, however the crash was a direct result of over supply. Land is plentiful and city's only have reduculys prices through poor infrastructure or artificially reduced development.
Land is plentiful. Land with the correct planning permission is not.
Credit however is not constrained except by a willingness to borrow and on the up this is near-unlimited. Fortunes are made not by doing but by speculating and then at the end the workers pick up the tab.
Would love to know how anyone could downvote this!
Come on, let's hear how rents are not tied to wages in a thread about remote working providing higher wages than the local area but lower wages than the hot-spot.
This seem to be exactly how it works. A lot of states and countries have tried to fix the problem by introducing housing benefits – but guess who, in the end, gets that money?
> many startups cannot afford to pay 400K to developers
It's a good point, but I wouldn't expect a construction company that could only pay 20% of cost to hire cranes to complete many buildings.
So maybe startups in that bracket just aren't viable under their current models. Maybe they need to rethink their salary/equity mix to make up for lack of cash.
Yes, i'd take a $70k salary while living in North Carolina. But the "shortage" being discussed here is for the Bay Area. I'm here, let me break down my costs:
- $17k taxes
- $3k health care premiums
- $7k college loans
- $36k rent
- almost nothing left for savings, retirement, down payment, engagement ring, any means to get out of my situation
I think I got the gist of OP's comment... Computer programmers make higher than the average salary. If you're barely making ends meet as a programmer your significant other is probably NOT making ends meet. Living together and sharing expenses saves some money but you'll probably be just about back where you started once you're married and co-habitating with your spouse.
Less 3k a month is in solid 1 bedroom territory for those neighborhoods these days. Around ~$2700 is what I'm seeing in my search for decent 1bedrooms in good SF neighborhoods.
I don't know why you got down voted. You're absolutely right. Most everyone will tell you, "Its about maxing total compensation as much as you can to boost your overall earnings!"
Good luck with burning out at 35 with no passive income streams. I'd rather build equity, and even have a couple of rental properties from being a top 10% earner in a smaller area. That's a million dollar piggy bank being filled by someone else AND a passive income stream on which to retire.
It may be a splendid salary in some locations outside the US, it is not in many others.
Americans tend to believe they are wealthier than anyone else. Not so! Apart of the fact several countries in Europe have higher salaries (and cost of living than the US) there's the fact major cities are much more expensive than smaller ones, even in poorer countries.
Case in point: The most expensive cities in the Americas are Sao Paulo, Bogota and New York. You can easily enjoy a higher standard of living earning $70k in most of the US than you can in Sao Paulo or Bogota (I've lived in both, I know it for a fact)
That's not the point, the point is $70k in Sao Paulo buys you a lower standard of living than $70k pretty much anywhere in the US but in a handful of cities.
$70k in Sao Paulo doesn't go much further than $70k in New York (or Tokyo, London, Paris, Singapore...)
Do I have to remind you how much a computer, a smartphone or a car costs in Brazil compared to the US?
I doubt your claim of finding "good enough" developers for $35k. I was making more than that in my first job, fresh out of school, when I had zero real world experience, working remotely for an American company, and that was in the early 2000s.
Most companies would be elated to find even a competent html/css/js coder for that price.
I understood your point about comparing São Paulo to other cities. I just wanted to point out that, in absolute terms (not relative to other ṕlaces), $70k is a great salary for SP standards.
About the $35k claim, let's make the math: currently USD 35k ~= BRL 115k. 115k/12 ~= 9.6k. That means USD 35k/year is roughly BRL 9.6k/month, which is the salary of a Senior Java guy here. Idk about 2000, but it seems like you were doing very good back then.
Fair enough, but the point stands. If I were given the choice of a $70k/year position in Sao Paulo or, let's say, Miami, FL. I would take the Miami location without hesitating for a second. $70k goes a lot further there than in South America. Literally everything is cheaper in Miami than in SP (or Bogota, where I am).
Most software developers, as most people, in South America simply cannot afford the standard of living of a first world country, even when they make a great salary for local standards. Most things don't cost any less just because the local population cannot afford it (and very often they cost more).
You're comparing local salaries with remote salaries. It's very different, 95% of local guys are unemployable remotely due to a combination of lack of language skills (huge factor), low skill level, shitty work ethics (another huge factor) and being stuck in dead-end technologies like Java.
When American companies look for remote developers they want people who speak excellent/perfect English, are in the same time zone, have (at least) above average skills and are willing to work like Americans do (Americans are workaholics, you'll be surprised at how damn lazy/unproductive most people are). I've been working remotely for 10+ years and I've been asked to find local talent several times, and finding it is hard. I've only vouched for one guy in all this time, and he quit after 6 months and moved to the US (and the pay was spectacular for local standards).
70k is a good salary even in many places within the US, the problem is that the cost of living in SF and NYC makes that salary very hard to live on. Rent in some locations within SF and NYC can meet or exceed 70k.
I get that, it's just so unreal to see these numbers for the same thing as I do. This is a really good reason why remote work is going to level the market. I'm a bit surprised that it's not already around 50% of hires.
Compensation has nothing to do with "shortage of engineers". Engineers have to come from somewhere, and the only way higher compensation can bring more engineers is by competing with other industries or regions.
It's not like engineers prefer living on social welfare to an underpaid engineering job.
I'll address this one, see also vostok's comment below. I know plenty of former engineers and other super-smart technical people who wrote software for years but left because they hit the salary ceiling. They would go BACK to software engineering in a heartbeat if there was a compensation trajectory that matched their current jobs.
400k is market rate for top-quality bay area engineers, depending on specialty [0]. You don't see job ads for those folks, because hackers like that don't read them.
[0] And even for lower-paying specialties (like UI/UX), 400k isn't even 2x market rate.
At these rates it doesn't make any sense for any company to hire in the bay area. There are amazing engineers elsewhere in the US and in the world who have much more reasonable salary expectations and also live in places with much more reasonable living expenses.
Bay area engineers like to pretend that there are no people of their calibre elsewhere in the world, but that is just flat out wrong.
Not really. Developers who are good enough to command that wage in the Bay Area, but who live elsewhere, also know how good they are. They might be willing to take a slight pay cut from what the lives-in-Bay-Area person would be paid, but whatever the pay cut is, it will not be proportional to cost of living. E.g. if I could earn 400k living in SF, but you offer to pay me 200K living in Lincoln, Nebraska, I'll turn you down. Not because that's not a good wage for the area, but because it communicates to me, as a potential employee, that you are trying to effectively extract rents on my productivity. You know that I'd be worth at least 400K to your business, but you want to slurp up an extra 200K off the top of that by paying someone who resides elsewhere. As an employee, this says you don't value me according to what I can add, but instead are looking to minimize my share in what I produce, and will use geography as a convenient excuse for it.
Beyond a certain level of salary, salary stops varying too much by cost of living or geography. If I make well over 200K per year in a major city, I'm going to expect someone else to pay me 200K/yr at least no matter where I live.
I wouldn't even try to get other job offers to negotiate you on it -- I'll just simply believe you're not meritorcratic and flat out reject your offer and view your company skeptically from then on. Low-balling an exceptional engineer over geography is dysfunctional in the same way as working really hard to hire a senior, experienced engineer and then telling them "2 weeks vacation is the standard for all new hires.." or something. It's just a big red flag.
The bay area gets a lot of attention because it's the software capital of the world, and software has these crazy gross margins and rapid life cycles that allow companies to be born, experience explosive growth, make insane profits, (potentially) suffer radical declines, leading to a quick boom or bust. Software companies make great news stories, so the bay area gets a lot of attention, and many talented people who aren't sure where to go decide to move there.
I live there now and work out of coworking spaces where I've met a number of startup founders. Many of them are self-proclaimed visionaries hyped up by VR and AR or IoT. Few of them are as smart as my friends who are getting their Masters and PhD degrees at Duke, Wash U, or Case Western. The most impressive startup I saw in the last year was being made by a self-taught programmer/entrepreneur building his own company out of Colorado Springs.
Beyond just my anecdotal evidence, where do MIT and Harvard graduates go? Where do Georgia Tech, Rice U, John's Hopkins, Carnegie Mellon graduates go? Silicon Valley doesn't take all of their students nor just the top in their class. Some people move to DC, Seattle, Chicago, Boston, Austin, NYC, or Denver because they have family or friends there, or because the kind of work in these other cities is more appealing than The Bay.
Apologies for the rant. I realized after writing it that your 'Not really' comment was probably in response to the parent's assertion that companies should hire from outside the bay area, while I took it as 'Not really' in that there are no engineers of the same calibre outside SV.
Regardless, the amount of hubris and hype over the Bay Area is staggering when there are so many equally talented engineers all over the US.
Why do you talk about ivy league graduates? Honestly, the degree is completely irrelevant. If you're a good developer living in Europe and/or the US, you can command $200k-400k a year (often as a consultant) doing specialised work. Plenty of companies are comfortable paying a day rate of $2000-5000 for someone who can deliver results. Not always super easy to get the work, but doable.
I think that the common US conception of education value and pedigree is a function of the high sticker costs and some romantic notion of meritocracy.
Seriously, I work for a US company in Europe, and am massively surprised (and disconcerted) by the fixation on where someone went to school.
We had an awesome candidate a few months back, did 4 interviews with us, aced them all, and one of the final interviewers (US-based) was obsessed with where they got their university education, whereas I don't think anyone else had even noticed it (being more focused on their skills).
Turns out she'd gone to Oxford though, so it was all good :/
Some businesses extract value from an employee based on how impressive-seeming that person is on paper. This happens a lot in consulting, finance, law, arts, academia, corporate business administration and politics. In these domains, status and affiliation are very important, generally vastly more important than actual productivity. Since these fields are also associated with things like wealth, elite status, access to private clubs and opportunities, being a sought after relationship partner, etc., it glamorizes them and by extension glamorizes the path necessary to get to them -- typically either happening to come from a well-connected family or else attending an "elite" school and succeeding in networking there.
Effects like this snowball. So once a school is known for producing graduates that others are desperate to affiliate with in a certain field, like say art or law, then impressive people from other fields may be drawn to work there, like an excellent professor of computer science who thereby actually does elevate the level of education granted to computer science graduates, making graduates into the sorts of people that tech companies want to get on-paper for acqui-hires because acquirers will want to affiliate with them.
One general trend I see in humanity is that the more that we advance a sort of scientific and rational understanding of the world -- something that should supplant most of these systems of credential -- the more that human politics is used to build Dutch book-like circumstances in which, no matter what the outcome, impressive-seeming-ness and competition to affiliate with "fancy" people will continue to be the dominant manner of achieving wealth and autonomy.
To be clear, even though I attended an Ivy school, I find this lamentable. I did not enjoy my time there and feel basically how Mike Reiss feels. But at the same time, I also see all the banter on Hacker News about how the degree doesn't matter and I just roll my eyes. What is it that people think? That something like HackerRank or TripleByte are going to democratize tech hiring? Please. They will be (and already are being) used as just additional tools in the political toolbox to allow people to make up whatever arbitrary standards they desire for the sake of favoring candidates based on political reasons.
My comment was solely about the desire or ability to pay top non-Bay Area devs far less than Bay Area devs.
I agree about the hubris. And for as much hubris as there is about the coveted "SV developer" it's at least 10x worse hubris regarding the coveted SV startup as employment destination.
You have to bear in mind that the dollars productivity of a programmer (how much money that programmer brings) doesn't only depend of his/her skills, but also of the company he's working. A programmer can bring tens of millions a year if he works in HFT in a hedge fund, much less otherwise. Companies in the Bay area have access to more funding, and are (I assume) willing to pay good programmers the high salaries you mention to be able to bring quicker their products to market. A standard company isn't in that situation and paying 400k for a top programmer, as good as he may be, isn't probably just worth it (at least if that programmer is an individual contributor).
I have not found this to be true at all. The highest wage I've ever earned was from a rank and file big box corporate firm doing incredibly boring parochial line of business work as an intermediate developer smack in the middle of the engineering hierarchy.
I've worked in quant finance before too and the trouble there is that pay is more political. Firm sizes are smaller and the people with political power extract a bunch of rent, then leave a comparatively tiny bonus pool for all of the low level workers. It takes years of soul crushing political games to get up into that stratosphere of much higher bonuses. On the bottom, the firms will also hassle you hard during negotiations to try to ratchet down your base wage too, and make lots of unverifiable promises about how compensation will be made up out of bonuses. Whether this turns out true or not is largely a function of whose political darling you are. Ironically, as boring as the work is, this happens far less in rank and file companies.
I think there are so many confounding variables that it's not useful to draw sweeping conclusions about this. Sometimes big box corporate type companies will pay huge wages for someone who just maintains something that is not a revenue powerhouse at all. Sometimes firms will restructure to have fancy new divisions that "are like a start-up inside of an established company" (ugh) and they'll hammer down on only hiring young, inexperienced workers on cheap wages in a shiny new urban office who will work a ton of hours. It varies basically as much as the hyper local political circumstances of the teams vary.
> There are amazing engineers elsewhere in the US and in the world who have much more reasonable salary expectations and also live in places with much more reasonable living expenses.
Then hire them either remotely or open an office at a place where the living expenses are much cheaper (but the latter also costs money for the company which it could also spend in salaries). Where is the problem?
Can verify - I turned down an opportunity for lead frontend work a year ago for $350k-400k (a lot of compensation in stock/bonuses, so it was variable), and that wasn't even at a big tech company.
(For the curious, I opted for tremendous work-life balance instead)
Where are you currently in your career? I'm kind of curious, because I never hear of compensation packages normally going up that high. So I'm wondering what skills companies are looking for at that price.
At that point, I was 2 1/2 years in - that was a year ago. That was a rarity I think, although there are numerous stories of Netflix paying $300k+ now.
Yes, that is what many of us do. We either leave the tech industry, or tech positions, or the area. There is no "shortage", it is just that "unfillable" positions dont pay a living wage for the locale+experience.
Uhm, usually because living in the Bay Area is actually a 10x better life for some people. Great weather, very diverse, lots of jobs, public transit is good, arts are amazing, food is amazing, close to sea and ski, etc. etc.
Somehow I doubt that any of that has too much effect on quality of life. I live on less than 400 USD per month and I bet I'm happier than the average Bay Area resident. I also know that I eat far better. Via the internet I have access to all the arts I could ever want. My transit is a bicycle, which is ideal for me. My city is FAR more diverse than anywhere in the US and I'm a few hours from the sea. Weather is a bit hot but I like that. But like I said, pretty sure whether I'm happy vs. sad derives from something else entirely.
Phnom Penh. It's a really nice city if you stay away from places where expats congregate. Lack of open spaces and fields though are something that I miss. It's dirty too, but its other charms make up for it. Every day I buy the best fruits and vegetables I've ever tasted at the market near my apartment.
The bay area art scene could be better, but I doubt 10x better. Fort Worth, which I used to compare in my previous comment, has some pretty strong art museums recognized internationally.
Soon Fort Worth will over take San Fransisco in population, and at the last recession was far less disrupted economically. Speaking purely from data and statistics Fort Worth is more diverse than San Fransisco with regards to ethnicity, religion, nationality, and so forth. And I doubt there is a substantial difference in the diversity of food options since I have been to San Fransisco. The weather and public transit are likely superior though.
Otherwise, if I were single and had 10x the income I would likely agree that the bay area is a more fun place to be.
Spot on. I'm director-level on the east coast (not NY, DC or Boston, although I came from DC). While I could probably see a 50% raise going to Silicon Valley, that wouldn't even come close to keeping me whole unless I'm supposed to stuff my family into an apartment. That said, I'm not sure what more the tech firms can do - wages are already really high out there and they're pressing the cities to let them build more housing (as in, not permit more housing in general, but that they'd even foot the construction) and the cities aren't going for it. At some point if a geographic area says no more growth, its time for businesses to pack up and go elsewhere.
Even for companies that pay good salaries there is a shortage. If you look at the H1B filings, you'll see for example that the average Netflix H1B salary is just about $300K a year.
That being said, a lot of companies are abusing H1B and the system needs a huge overhaul so that the people who want to come work here can, the people who want to hire foreign works can, and we don't have a few companies using imported workers as indentured servants.
I'm familiar with these opportunities. They are not entry-level positions, they are highly technical positions which require extensive architectural experience...the sort that individuals often have mid-career (often with children, braces, school tuition, medical co-pays, etc.)
So yes, $300k for a mid-career position is clearly not enough in the Bay Area. Could you raise a family in a 1BR, yes you can! But there is a "shortage" of people who want to raise a family in a 1BR. There is no magic here -- pay would need to be commensurate to experience + cost of living or people simply will not take the job.
I've just been chewing that over. That childcare cost is phenomenal and illustrates Bay Area prices to me better than housing cost examples. Unless that cost is completely misleading...
> That childcare cost is phenomenal and illustrates Bay Area prices to me better than housing cost examples
You can pay that much for elite child care in places that aren't the Bay Area. The Bay Area probably has more people that are price-insensitive enough to imagine that the kind of places that charge that much are a reasonable minimum for "high-quality" child care, though, but that's more a difference in incomes than costs.
To be fair "elite" here means a child care facility that can stay overtime when I am stuck in the office on production duty till 9pm, which is like every week. This isn't a government job where I'm guaranteed exit at 5pm on the clock.
This is a wildly exaggerated calculation. I make roughly around 300k and my effective taxes (both Fed and State combined) was 28%. I also have daughter and she goes to daycare that costs me $1200/month. I also own a 5 bedroom 2800 sqft house in East Bay, that costed me around a million bucks and the mortgage is around 3500 including insurance and property taxes
Mortgage interest deduction, probably. And it seems like we've gone full circle to the original comment about bankers capturing all the income beyond what it should cost to eat every day and build a house to sleep in.
Mortgage deduction, property tax deduction, child credits, business expenses, charity deduction, medical expense deduction, child care deduction. Also, the entire state taxes is deducted.
My 300k is 1/3 in private stock options which may not actually become money for another 5yrs, if ever. They don't accept it in exchange for homes and my 200k income isn't enough to buy a home, esp given there is a mass layoff every 7yrs. House prices go up more than the down payment I save each year so I get further from owning a home. Oh, and the east bay is about 2hrs fro SF so I'd never see my kids even if I bought a home
You do not need to spend more on childcare than the average Silicon Valley family earns in a year. Look at the census data and you'll realize you're a bit out of touch with the reality most of those you share a city with live in.
Unlikely. I mean, with absolutely no deductions, credits, or exemptions at all, your combined state and federal income and payroll taxes at $300K would be about 44% -- assuming a single filer.
I'd suggest that an even cheaper solution for them in the long run, instead of raising the pay they offer, is to figure out ways to cause less "false rejection" scenarios. I totally understand the desire to avoid "false positive/hire" scenarios. But currently our field also has a big problem with false rejections.
This would have the added bonus of increasing your usable talent pool both among residents/citizens as well as among remote/off-shore/foreign candidates.
Remote work is not a silver bullet for solving the faux work shortage. Aside from the fact that there is no shortage in the first place [1], remote work is still very new. Without proper operations in place and a solid, tested, management structure you'll end up with a hodgepodge of culture and unhappy employees. I used to be bullish on remote work until I actually started doing it. It can certainly work, and I still encourage companies to explore it, but it's not a one size fits all approach, or a replacement for proper organizational management.
Those of us that have worked as remote engineers for a lot of our career know that most companies in general are just plain not managed in a way that would work for companies that have lots of remote workers, especially larger companies. Policies that discourage and undermine remote work that are popular with large companies include:
1. Mandatory all-hands meeting times
2. Banning popular communications platforms like Slack, Google Chat, Skype
3. Expectations of all workers to be present continuously for their timezone instead of letting workers self-organize
4. Performance and productivity metrics based around KPIs that do not actually measure productivity but presence
5. Incompetent IT Ops mostly staffed by cheap contractors to offset overpaying for terrible hardware and software from Cisco to ensure a complete inability to reliably utilize the corporate VPN.
Having been ops before I have to stand up a little. Not all contractors compete primarily on price (in my case I was paid substantially more than FTEs and even other contractors I found out - 20%+ more than my peers, in fact) but also based upon scarcity of qualified persons. I've rarely heard of VPN that's consistently stable that meets the conflicting requirements that IT managers ask for. Juniper, F5, Cisco, and even smalltime crap based upon OpenVPN just constantly breaks repeatedly in many real-world corporate networks.
This doesn't mean that you're incorrect though - most IT O&S winds up going to lowest-bidding contracting companies and offshored resources that are measured upon the dumbest KPIs ever that completely leave out whether users are actually happy with anything at all. In fact, most IT in the F500 seems to have given up on ever making users happy. I'd say the better measure would be tickets / user filed - if a user never files a ticket, they're not complaining.
It was a sad day when my old company shuttered the web-based VPN portal, which allowed us to access the company intranet through a browser window. Closing it down required us remote workers to connect and send all of our traffic through AnyConnect, killing our connection speeds. Come to think of it, we were still running Windows XP on all of our laptops when I left in mid-2015 (laboratory information systems).
Almost everyone I've worked for in enterprise and defense, for starters. A couple places didn't allow chat applications that recorded history (too much liability during legal investigations was the excuse I heard). Doesn't mean that these policies weren't violated.
This isn't the worst I've heard by far though. A lot of places won't give developers even power user access to their own laptops so you need to request installation of every application you might ever want, including git, Cygwin, etc. Many places will not allow users to run VMs either (and will disable VT-x mode in BIOSes that are locked out).
I got my first remote position in 2002. That's 14 years ago (time flies, doesn't it?). I wouldn't call that "still very new".
I do agree it requires a certain know-how to make it work. It seems to me there's more of a shortage of knowledgeable managers than there is of able developers.
Making remote work work is "easy", but it requires breaking a lot of existing behaviours.
Devonkim is right, remote work fails because people think it will work just like working on premises
Rather, you need your work on premises to work the same as remote.
- Communication is key: slack is good, but actual phone or video calls are needed (and face to face meetings sometimes - just so people know each other). But more importantly, nothing should depend on a face-to-face meeting. This requires people to actually stop being lazy and getting communications going
- Good infrastructure for code/testing, no "this is only available on site" kind of stuff
- Redundancy and fallbacks (what if the internet is down?)
- Clear information on the people to reach for anything you might need
A great comment (which I'd upvote more than once if able). There are many underpinning problems that lead to business inefficiencies - none of which are solved by choosing to hire remote vs. local (or by "using the right tool", which is another decision folks make to try and put out management fires). If you have "human problems" you need to solve them the hard way; or as was said: there is no silver bullet.
One additional reason that I've observed to add to the list:
* Declining dominance of the Microsoft/Oracle hegemony in secondary markets
During the '90s Microsoft and Oracle were particularly effective at entering emerging markets and pushing their solutions to such a degree that "computer programmer" became synonymous with "Microsoft/Oracle developer". Thus, if you wanted to become a software developer in one of these markets, it meant learning C#/Java, along with all the ecosystem, tooling, and inevitably...lock-in.
Fast-forward 20 or so years, and the Open Source movement is finally beginning to crack that shell of lock-in. Anecdotally, when I first moved to Turkey 4 years ago, technology job sites almost exclusively listed C#/Java positions. Today, I know many Python, Ruby, Scala, Go, etc. developers living and working in Turkey, and there's been an explosion of related conferences, trainings, events, etc.
The one last hurdle I see that needs to be overcome in these places is the notion that developer education is as much a concern for those that employ developers as for the developers themselves. Pretty much all of the conferences/trainings have to be held over weekends because it is still difficult for developers to get time off during the week to attend. Once that bit of cultural shift happens, I only foresee this trend accelerating.
Unfortunately I'm woefully behind on blogging, and there's a number of programming topics that are higher on the list than anything like that. In short, though, Turkey is a great place with friendly people, breathtakingly-amazing food, and lots to see and do. I work remotely, and English is the lingua franca of everyone I work with, though I have managed to learn enough Turkish to get around at home.
"Fast forward 5 years, now more than 20% of the positions there are open remote work! " At GitLab we think that remote only is the logical conclusion of this http://www.remoteonly.org/
"High speed Internet." apart from that the tools (video calling, etc.) are also getting better.
Thanks for sharing that link, as I've never seen this Manifesto before. This puts into words so much better than the explanations I give people for why I prefer remote. It's interesting to see some of these on the list -
-written down processes over verbal
-async communication
-formal communication over informal
We often hear alot about enlarging your net of potential talent (#1) and flexible work hours, but there's much more to it than that.
At this point, I can't imagine _not_ working remotely anymore. I'm just sooo much more productive and happy this way.
I happened to be in Russia when the Who's Hiring thread showed up. I have family there, so I was entertaining the thought of possibly moving there, or maybe staying for a year or two.
However, I noticed most of the remote locations were "US-only", and even the ones in other countries were usually local to that country -- "germany only", etc.
I was wondering how many of the "US-only" ones would accept me, since I am a US Citizen, just not living in the US. Or is there some kind of tax reason they have to be US-only?
I am from Brazil, since I graduated around 2009, I never got a 100% legal job, and never got a well paying job or contract.
I keep hearing that I should move, or should work remote, I always reply: "How?"
Because most countries only allow you to move into them if you get invited or is already wealthy.
Most remote jobs I see, no matter where I look (I don't look only on HN) are US-only, or local only.
Most jobs that accept foreigners, have written on them: "Must already have H1B or Greencard"
So what I am supposed to do?
People criticize me when I complain that my yearly income has been on average about 10.000 USD, and I have to expend 2000 USD to build an "average" computer (or 4000 USD if I do it with only 100% legal parts with all taxes paid), saying that I am "stupid" for not working remote or relocating. But I am yet to see someone offer me a solution.
Even people that could hire me directly, sometimes say to me: "Oh, I loved your work, I am sure you will find work! Of course, I can't hire you, because it is against my company policy."
Pretty much this. I keep hearing how if I were in the US I'd be earning $80k minimum easy, but it's the getting there that's the hard part. As it stands, I'm barely making market salary here in New Delhi because yay startups.
A way to get experience might be to suggest that you're hired as a consultant or contractor. It's easier for the company to do, but be careful that they still treat you fairly. I know a company in the UK that does this for its remote workers.
I don't lack experience. I lack JOB. Or REAL contract.
I've been working since 2009, I have lots of projects done, plus a startup.
But most of this, is not legal, usually I had jobs pretending to be contracts (ie: it was a day job, but paid as if I was a contractor, highly illegal in my country, because the government consider this a way to avoid following labour laws... and it is exactly that), low-paying contracts that don't follow all laws correctly either, stuff paid off the books, and so on.
But I found noone, in any country, willing to hire me 100% legally with fair pay, either as employee or contractor. (I did got some offers for legal work, but the pay was always less than my student loans, and later the loans I made to pay student loans, so not worth it at all).
As the parent said, you should try jobs coming from recruiters on LinkedIn (that's where they hang out the most) US enterprise companies hire consultants through the recruiting agency. InfoSys, Tech Mahindra, DataArt, Altoros, Ness, HCL, a bunch more. They will hire you legally but usually take half of what they agree with the hiring company. Say the hiring company pays $80,000 on a contract you'd only see maybe $40,000 on your employment contract. They take cut of an undisclosed amount. These are legitimate vendors. Basically outsource. Browse LinkedIn.
Sorry, I didn't mean experience in general, I meant remote experience. But if that's been your history so far, I'm sorry that it's been difficult for you :/
It's legal. It's a huge pain in the ass to hire someone whose physical address is outside the US if your company is based in the US. Heck, it's a huge pain in the ass just to hire someone outside of a state you aren't already operating in.
Just ask the person to form a company and hire that company? I've never heard of anyone having any difficulty with this. And even if you're paying an individual you just need to get their W8-BEN or withhold 30%; it's not that difficult.
Forming a company isn't all that easy. Also, now that person has to pay their own SS and Medicare tax, or if they form a C corp, they have to file incorporation papers and tax returns and filing fees and...
Also, if I pay a person through their company like a contractor for too long, the IRS comes down on me because they assume I'm trying to skirt tax laws (and rightly so, because that's basically what you're suggesting).
It's fine if you do side gig's 1099. But if I have someone doing full time work for me where I set the wage, that's not a contractor anymore according to the IRS and they get really suspicious when your "contractor" has worked for you and only you for many years.
The levels I've heard from bigger companies I have worked for is 30%--they didn't want to provide more than 30% of my income via 1099 contracts because more than that would raise "he's not a contractor" warning signs.
On the other hand, I worked for a smaller company as a 1099 contractor and was billing up to 67% of my yearly income to them.
In both cases I set the rate and determined my time off.
Outside the US is actually easier in some respects if the person is willing to set up a company in their own country, but I suspect in many countries it is as complicated as setting one up here in the states, and I wouldn't have the expertise to help them.
I suspect a job listing that says "remote anywhere in the world as long as you set up your own corporate entity with a foreign registration in the United States" wouldn't work very well. :)
> if the person is willing to set up a company in their own country
I can't speak for other countries, but in Australia this is far simpler than most people realise.
There's a range of companies that will do all that for you. They set up and operate the company, they do payroll & taxes, they handle insurance.
When I worked remotely for a US company, I was technically a contract employee of an Australian company that existed purely to handle the contact work. I paid them something like $1-$2 per hour (that I worked) to handle all of that, including indemnity insurance, etc.
The only hard part was that the people that handled it weren't set up to easily handle foreign currency, and I was being paid in (and invoicing in) USD.
Other than that it was easy - in fact it was even better than when I contracted to Australian companies because I didn't need to charge sales tax, so more money went in to my pocket.
Well my point is that paying an individual outside of the US is fairly straightforward. They fill out a form guaranteeing the company they don't owe withholding (W8-BEN), or the company keeps 30%. At least that's what the lawyers/accountants I've dealt with have said. Probably harder if you're extending benefits and whatnot.
I think a combination of simpler tax/administration and timezones.
Working with a distributed team across the world's time zones (f.ex. Bay Area and much of Europe are 9 hours apart) is an entirely different game from working with a distributed team in roughly the same time zone. The latter allows you to organise as a digital version of a colocated office, eg you can you standups, easily plan meetings without negotiating against half the team's evening plans.
The first makes most sense if you manage to be mostly meeting-less. That's more challenging in my book, but maybe also more rewarding - and not only for hiring reasons (after all, meetings easily become a waste of time).
I'm in the US and find that even within the country many of those jobs are listed as "remote" but then I will hear something like "we're not looking for people in your area". Do they understand what remote means?
Same with the LA area here. "Santa Monica" is mentioned once, but if you aggregated all the locations that fall into the Greater LA area, I bet it would rank higher.
Cambridge and Boston should be together, but Silicon Valley and SF shouldn't. I could walk to Cambridge from my house in the city of Boston. There is no way I could walk to Palo Alto from SF.
I have to question if you've ever done a SF -> Silicon Valley commute. There's always traffic, and the Caltrain station is inconveniently located for most of the city, which means you need to tack on time to get there. Additionally, most SV offices aren't that convenient at the other end.
Remote is still rare, it seems, because usual sweatshops are traditional habitat for pointy haired bosses and other parasitic "management".
For remote, the way Linux kernel or BSDs are being developed, one needs nothing but git, emacs and browser (well, in case of Linux also a working mail) and no management at all. How could, say, Amazon, even hypothetically switch to remote?
More seriously, there is no market for code - otherwise people would just pay per commit (passed all the tests) nice and easy. The problem is people with money doesn't need a mere good code, they need their positions, their bonuses, their status. They will pay you for filling a slot in the social hierarchy which supports them, not for your good code.
This is why, perhaps, remote works fine for "nonprofits", like FreeBSD, but for corporations it is still a heresy.
Again, there, it seems, is no demand for mere good quality code.
This, by the way, is connected with hiring. Almost no one hire for abilities, everyone is hiring for good school diplomas. (Which diploma Mike Pall has? Igor Sysoev was a college dropout).
If I am wrong, and there is a market for code - solved problem, pushed a commit, all tests passed, money transferred - please tell me, I would participate gladly.
Much (most?) code is trivial to write, the work is figuring out what code to write -- posing the problem correctly is half the job.
Then inevitably as you work on solving the problem you will (if, and only if, you know the business domain well enough) discover that the problem description needs refining as the code is refined.
If there was a market for code I would not participate since it takes me less time to just write the code than to write a spec you could use to deliver something good. Non-programmers cannot do that, but if they are in the people you wanted to avoid, they would likely make a spec that would create a mess, regardless of how good the code driving the mess is.
I don't see how remote vs not has anything to do with managers or not...how would you get the "orders for code" written in the pure-code marketplace?
The trick about open source is mainly that the programmers ARE the end-users too and very well able to understand the problem domain and also are often scratching their own itch. So the problem of making good problem descriptions and make the code match it disappears. That is much more important than remote vs non-remote.
> They will pay you for filling a slot in the social hierarchy which supports them, not for your good code.
This is absolutely true but remote workers can still be FTEs that extend a manager's umbrella of influence. So really, working remotely is orthogonal to managerial pyramids of power.
If anything, hiring remote workers may allow managers to get more employees working for them because they can get more bodies for the same amount of budget.
Not always. A friend of mine works remotely for a financial institution. His manager wanted to revoke his work from home agreement because he wanted to hit a target metric of number of man-days worked in a physical office to justify a corner office with upper management. Sad but true.
We embrace technology for every stupid purpose imaginable, yet remote work facilitated by technology is generally viewed with disdain. It makes no sense, which is why remote work will continue to rise into the future. The dramatic centralization of our industry into a few locations also doesn't help with the crush of housing costs.
Putting a laptop on a cart, keeping it at just the right position relative to the whiteboard wall, and jotting down notes and diagrams for the guys on the other end, is frustrating. Repeating ~10% of the statements in a meeting because of audio issues is frustrating. There are a lot more technologies that need to be brought to market, or improved, in order to eliminate the drawbacks of remote work.
Right now, I find that working with the remote people is fine when there is some separation between our work, like an API, and it is excellent when I can get work to pay for me to travel. But debugging or pair programming over a call, where we can only share one screen, is just painful.
All of your points are 100% true. There are workarounds, but generally I think we need to embrace these challenges as perfect use cases for our own work as technologists.
If you were to project our current technical culture many years into the future, flying cars, free energy, clean water, etc., would we still have to herd ourselves into a central location every day so we can sit in a chair that is positioned next to a bunch of other people in order to accomplish the most basic communicative/collaborative tasks? With all that we've accomplished and all that we will accomplish, it seems to me that's not the way of the future, that's the way of the past.
TL;DR; It's not that remote work is easy, it's just that we smell of hypocrisy when we try to apply technology to every possible problem while rejecting it for our own.
Have you thought about working in a shared screen session for code editing, with a parallel chat client for interactivity. Voice is just too low SNR for code.
Shared screen session? Are you referring to GNU screen, and suggesting that we collaborate on some sort of mainframe setup? That sounds like a really interesting idea, like that crazy shared tabletop interface the Wayland guys have been promising.
Right now, my setup is: watch the loudest person's screenshare on my small screen (1080p) and do everything else on the main screen (4K). Git push to a WIP branch every few minutes. It makes for an interesting git history, for sure.
I hope some policy makers in the government keep a watch on such threads. They will get an idea about the loss of taxes, that these remote would otherwise pay if they were to be employed in the US. Not to mention the social security and the indirect economic contributions. In fact all the anti-immigration camps should get a reality check at this point. In 5-10 years, most of the US tech jobs will be remote and not a dime of the remote worker's income will reach american shores.
There are tax treaties with most (all?) countries whereby you receive a US tax credit. In the case of the UK I believe even National Insurance contributions can be counted towards Social Security.
You receive some credits and deductions but the statement that "not a dime of the remote worker's income will reach american shores" is objectively and supremely false. The IRS brings in huge sums of money from Americans living abroad every year.
I lived in London for 3 years and did not pay a dime to the IRS.
That aside, your indignation over the quoted remark is misplaced since the GP was presumably talking about foreign nationals. So you're conflating two different points and then getting all self righteous about it.
It's $100,000 not 1m. Many countries have a tax treaty with the US so that you're not double-taxed, but instead pay the greater of the local rate or US rate.
My own assumption is that even though remote work will increase, it will remain marginal and not consume most of the IT jobs out there.
The simple reason being that the biggest IT/tech companies have invested heavily in land & buildings (think about how Apple and Facebook have built huge "campuses" - why they call the offices/building a campus, I don't know, but anyways ...) and they need to utilize those assets in order to avoid the "white elephant" problem.
Also, unlike "agile" software-development or on-demand hosting, they can't merely downscale their land & buildings as they would for their AWS clusters and they also can't sell these buildings, as they seem geared specifically towards the needs of their owners (it isn't just a regular old office-block).
So while some startups of the future will embrace a remote-first culture, the big tech companies and many other regular startups will continue along with the concept of a fixed-location and fixed-office well into the future.
Great post! A couple of nitpicks on the data presentation for the sake of making it even better:
1. You don't have enough data to warrant 5 significant digits in the percentages, and even if you did, is it really relevant?
2. The points in your plot are interpolated using some sort of spline, why? If the answer is: because it looks better than jagged edges, then you should probably remove the spline, because you're effectively adding extraneous information. On the other hand a linear trend line could be nice here.
I wonder how meaningful the "remote work" is, considering the legal issues of hiring workers from another country?
What if there weren't any?
Time zones aren't always the problem, high-speed internet is often common, lots of IT jobs are location-agnostic.
It could have a serious impact on the job market - what is poor in USA is upper 1% income worldwide, so an ability to get a remote job at USA prices can make local jobs uncompetitive by huge factors.
What sort of effects would this have on the world? Or is it meaningless speculation anyway, since the legal restrictions aren't going away in any plausible futures?
I'm increasingly curious about what kinds of trends there are in tech hiring outside of the English speaking world. Wouldn't the HN "Who's Hiring" thread being in English make it inherently biased in terms of global trends, especially when looking for the "next Silicon Valley" as the end goal?
Would a city like Beijing or Taipei be adequately represented here at all?
I've just run the query and it's 6 (not this month, all time) with Beijing as a location.
My best guess for China is: they have to have something similar, although obviously not in English. They have a huge market with limited reasons to cooperate with English-speaking Internet. Also, Chinese Internet is isolated you won't see many services that are available in US or EU.
Fun fact there was an attempt to implement (copy) whoishiring.io http://www.v2ex.com/t/213945# the reason they like it but no google maps in china.
...that post on HN Who's Hiring. Big difference (biased towards newer companies) compared the the Bay Area tech industry as a whole. For instance, I'd bet that Google (Mtn View) + Facebook have more job postings any given month than the whole HN Who's Hiring post. And that's not counting eBay, Cisco, Apple, LinkedIn, Tesla, etc etc etc.
Yeah, plenty of listings likely paraphrased per Jim Gaffigan:
It’s like, ‘Hey, where’re you from?’ ‘Me, I’m from San Francisco.’ ‘Oh really? Where in San Francisco?’ ‘Uhhh, outside San Francisco.’ ‘Where outside San Francisco?’ ‘Gilroy.’
I'm surprised as well. When I moved from DC to Portland I saw a massive decrease in recruiter spam. Even two years later I still get 10 emails per week about jobs in DC. Portland on the other hand? Pretty much zero.
No idea. I get random emails from shady "meetups" and networking events too. I can't report the spam and unsub fast enough.
The recruiter spam has transcended LinkedIn too. It's mostly direct emails from recruiters. I wouldn't mind if the jobs were even slightly related to what I do. It's pretty clear I'm a designer and frontend dev, but I get spam for Java and PHP gigs all the time...
London is in Europe as much as it has ever been. Geographically, its status hasn't changed -- whether you consider the island off the coast of the European mainland part of Europe or not; politically, its still the capital of the UK, which -- despite having voted that its government should withdraw from the EU -- remains an EU member, and not even formally on the exit path yet.
UK will also remain a member of the Council of Europe, a signatory to the European Convention on Human Rights, will probably have a Switzerland-ish deal on European trade, and will likely opt-in to a lot of European projects like the ESA and science funding/cooperation.
