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Comment by timr | Hacker News Reader

If this data is anywhere near reliable, then a large number of engineers are taking positions in the Bay Area with a horrible financial outlook.

The median one-bedroom apartment in San Francisco is something like $3,500 a month now. To keep that at 30% of gross income (which is still pretty bad), you need to be earning $140k a year. And yet, these graphs suggest that only "senior" engineers make $140k. And they top out soon after that (the "lead" roles are only making ~$160k).

If a company is asking you to move to the bay area, demand a salary that will allow you to live here without having to take roommates or go into debt. If not, make sure you're making a calculated gamble, and be sure you're getting some other concrete value for the financial sacrifices you're making -- career experience and reputation, for example.

If you're starting a startup in San Francisco...well, don't do it. Unless your customer base is here, you should go somewhere cheaper.

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I moved to Cupertino in 1989 from the east coast, to work at Apple. I was shocked that houses in Cupertino cost $400,000 (yes the same ones that cost $2M today). The pay wasn't nearly in proportion to the relative costs.

A friend pointed out that the high costs reflect the opportunity and that it was all worthwhile. And he was absolutely right.

It's true that the long work hours and high costs in the Bay Area can mean delaying a family and other such things. And that's a tradeoff that should be made carefully, whichever direction you choose. It's important to acknowledge that both choices are perfectly legitimate and a matter of personal preference.

This is exactly what I was coming here to say. All this tells me is that San Francisco engineers are woefully underpaid.

Whenever a recruiter calls and I (accidentally) answer and they proposition me with a job in SF I tell them I would need to be paid twice as much as I'm earning now (in Seattle) to consider it. And I'm compensated well. It's true, and as a side benefit it usually ends the conversation quickly.

Paying engineers more will most likely increase rent prices accordingly. The solution seems to match recruitment objectives with available rooms.

Lower rent will come with increased capacity. Part of the reason rents are so high tis that california does not add capacity very quickly because the permitting process is very burdensome and californians are the original NIMBYs-- yes even about housing developments.

Thus there are rows and rows of 3-4 story buildings instead of high rises full of apartments.

The conversation on this is incredibly hypocritical. The area where there are "rows and rows" of 3-4 story buildings is the 2/3 of SF where tech people don't want to live. Places with names like "the Sunset" and "Ingleside", that consist mostly of single-family construction.

No, when tech people talk about "building up", they're almost universally talking about replacing tenement buildings in the Mission with high rises. This has the unique property of displacing extremely poor people, and allowing tech people to live in luxury buildings in a small neighborhood that has recently become trendy, but was historically desirable only to poor people.

The problem isn't permitting or NIMBYs...it's that a relatively entitled population of recent arrivals have lost their fucking minds, and expect to be able to cram into the same 20 blocks of SF and not have to pay for the privilege. When they don't get what they want, they blame the laws for not allowing them to get what they want.

The "real" solution is for the city to "incentivize" tech companies to locate elsewhere, but given that our local politicians have fallen in love with this bubble, I don't see that happening.

Building housing doesn't displace poor people.

It does when you're knocking down older, cheaper buildings and replacing them with luxury units.

San Francisco has knocked down almost no older cheaper residential buildings in the last several years. And the one that they did that I can think of (Trinity Place) deals were made to allow the previous tenants to live in the new building at their old rents for the rest of their lives.

What's unspoken is that their list is probably all startups.

If you work at established companies, or late stage startups, the total equity package is going to be higher.

That is, I'm pretty sure that if you work for Uber, Twitter, FB, Netflix, etc, you will be making well north of 200k+ a year if you are senior+.

Just one data point, but when I spoke most recently to one of the companies on your list, I was quoted $170 for a lead software engineer role, "but only in our [Bay Area] office".

Big companies don't want to tilt the market against them, either.

I received a similar offer from one of the companies on the list to work in Data Science, which was quoted as a senior-level role.

I think you're right that it's mostly startups, but that's also the job market in SF right now. They far outnumber the established companies.

Also, from what I know of (fairly experienced) friends and acquaintances working at larger companies in the bay area, the financial trade-off is still pretty sketchy. A salary of $250k a year will support you well in a decent single-guy lifestyle, but it won't go much further than that.

Even with rents of $4000 a month, $250k is a fantastic salary. The median average family income in NYC, btw, is $50,000, and the average rent is similar to SF.

Yes. Many of the comments here speak of a growing disconnect between the elite engineer class and the regular people. This can be dangerous to our profession over time.

$250k / year will only support a "decent single-guy lifestyle"? That's just insane anywhere in the world (except maybe if your last name happens to be Al Saud).

For comparison, that is significantly above the average salary of a European prime minister. German Chancellor Angela Merkel makes slightly more than $250k / year.

No kidding. I basically quit working and just consult part-time (in Boston, itself not exactly cheap) because I can live comfortably as a single guy for part-time rates. I'm as guilty of chasing the "high score" at times in my career, but to pretend that it's necessary is just...gross.

There is a disconnect: between people in SF, and people in most of the country who are paying less than a quarter of what SF residents pay for housing.

That's a big deal. Stop looking at the top-line number and exaggerating the lifestyle in your head. The costs here are insane. Someone earning $250k here is probably doing about as well, financially, as an engineer earning market-rate in any other part of the country.

$4k a month is 20% of gross at $250,000 a year. That's acceptable, but not great, and it gets you a modestly nice one-bedroom apartment in a "transitional" neighborhood in SF.

But hey, if your baseline for "fantastic" is the family in NYC that can barely afford housing, then have at it.

250000 a year gets you just under 12k per month after tax.

Even paying 4k for a decent home still gives you 8k a month for other things. Thats fantastic.

You're in denial. 4k a month gets you a very nice place in the NY metro area.

NYC also has a functional transit infrastructure. My cousin makes around $250k, commutes a little less than an hour by train, and owns a home that is essentially a mini-estate.

SFO is a gold rush town, but the model isn't sustainable. A shit-ton of semiconductor research has moved to save $$$ to Albany, NY of all places.

6x what the median family income is should be called fantastic, yes. It's literally in the top 2%, even in SF/NYC.

sigh No wonder all of my friends think most engineers are arrogant and out of touch with the rest of humanity.

You're missing the point: in a city where a cup of coffee costs at least $3 and a small condo runs close to a million dollars, the numbers I'm talking about aren't arrogant, they're just life.

The top-end engineer salary of $160k doesn't go very far here, right now. I'm sure that the distance it goes feels like a lot when you're 23 and one foot out of the dorm room, but when you get older and start wanting to have an adult life (children, saving for retirement, maybe buying a place), it isn't even remotely enough.

$250k, in San Francisco, will rent you a market-rate, one-bedroom apartment ($4k, until they raise the rent next year), and let you live a pretty good lifestyle as a single person: you'll have something like $10k per month after taxes. If you're frugal, and don't go out much, you can get by on maybe $2k a month in expenses. That leaves $8k to save, invest, spend on children, etc.

We aren't talking about big, glamorous lifestyles here.

$250k a year is $12k per month after tax in SF.

If your baseline for living includes owning two luxury cars that you store in a private garage, a brand new luxury apartment, shopping exclusively at Whole Foods, having maids clean your house and take care of your children, and sending your kids to elite private schools, then yeah 250k a year is basically poverty. Life as an engineer sure is hard.

You have no idea what you're talking about. A public garage in a cheap part of SF will run you $200-$300 a month, per space. A small non-luxury one-bedroom is about $3500 a month right now, maybe closer to $4,000. A week of groceries at Trader Joes will set you back about $80 a person, if you're frugal and you know how to cook, and you eat nearly every meal at home, and you like leftovers.

Eating out at a restaurant that isn't a taqueria or in-n-out is about $20-$30 a person at the low end. A drink at a bar will set you back at least $6, and probably more like $12-$15. Getting your one-bedroom apartment cleaned once a month will cost you about $100-$150.

I don't have children, but not-rich friends who do have told me that unless you live in a "good" neighborhood and/or your kid can be bussed long distances, you really have to consider paying for private schools, and that's something like 20k a year, per child.

So one-bedroom, one car of parking (not counting maintenance or the cost of the car), eating out at a modest place once a week: $3500 + $200 + $320 + $120 = $4140/mo. That's frugal. Want a kid? Dramatically more.

And please add saving like crazy for retirement, because for people under 40, there will not be any Social Security money left. And, if you have children, start saving for college (at $250K/child for private college and $120K/child for state college).

While $250K is certainly a comfortable level for a single person, it is not as outrageous as it may seem to people outside of the really high-cost areas in the US.

At the start there I thought you were talking about Sydney. Cups of coffee range from $3.50 to $5.00, houses anywhere close to the city are $1.2M+, and that cost stay constant to about an hour out of the CBD itself.

To have a salary of $250k means that you are well off, in fact I seem to recall that being the cut-off for the 1% range.

Engineers work their tail off to master their craft, build scalable products, etc. while the firm they work for potentially makes millions off the product. I fail to see why engineers shouldn't try to command a very high salary. Engineers are, and will be for quite some time, in very high demand.

Also, how does wanting to be paid well imply that he's out of touch with "humanity"? Are you comparing the engineering salary dilemma to those who lack food and shelter? That's a pretty silly comparison.

No one is out of touch for wanting a higher salary, and that's not what I said or implied. Quite the contrary, I think good engineers should be paid loads more than they are nowadays. However, the implication that making 250k a year is barely scraping is so ridiculous that it's perfect fodder for an Onion article.

Well I don't think he's saying hard to "live". We're talking raising a family, buying a house, etc. And I'm assuming he's saying support both the spouse and the kids. So yeah, in that case, things will be a bit tighter. It's not impossible, but it's not easy street.

Sorry, when you said humanity, it read as being out of touch with all the trials and tribulations of man kind. My mistake if that's not what you meant.

$4k a month can get you three bedroom apartments in multiple cities next to San Francisco.

$250k is easily enough for a family of 4 to live a reasonably affluent lifestyle.

San Francisco rents are worse. Five years ago, SF was a better deal.

Also, if you're a decent programmer in NYC, you'll make 20% more than your counterpart in SF. The downside is that NYC finance jobs don't involve equity packages. The upside is that there are bonuses (wildly variable) and there's much more of a career track. Finance companies care more about their peoples' careers than Bay Area tech companies, and that's a big part of why the techies end up answering to finance in the end.

This comes up time and time again on HN. Due to the demographic here, everyone seems to know at least SOMEONE who makes $200K+, but there's no evidence that these compensation packages are anything but outliers (even including equity), no matter the age/vintage of company.

I thought Netflix was the outlier company.. but then again it is only ~500 engineers or so..

There's plenty of evidence. Just look at glassdoor:

Google senior eng total comp is $252k annually: http://www.glassdoor.com/Salary/Google-Senior-Software-Engin...

Google Staff engineer is $350k annually with base salary over $200k: http://www.glassdoor.com/Salary/Google-Staff-Software-Engine...

Outlier employees of an outlier company

Editing my curt response:

The original poster asserted that he/she was "pretty sure" that if you work for [established companies], you "will" be making well north of 200k+, as if it was a certainty or at least a high probability. I don't deny that some outlier companies have some outlier employees that make that much, I'm just questioning the claim that it's usual to make that in these companies.

A) That $3500 figure (I've seen $3200) is across all SF neighborhoods, and the various neighborhoods experience enough variation to render a median figure less than useful for planning.

B) Anecdotally, many people do take roommate, especially junior engineers (early- to mid-twenties) at least to start with. The reality of living in an expensive city is that you will have to make certain accommodations to your lifestyle if you also want to enjoy the benefits of city living.

Living in the city isn't for everyone, but I think most people are aware that the tradeoff on commute is that you get a shorter one if you take a smaller house.

Then these companies are not adequately compensating employees regarding cost of living. Which is fine, but it's not wrong to point that out.

How do you arrive at that conclusion? Where does this assumption that your company should be paying you enough to rent a 1BR in one of the most competitive markets in the country come from? This is as baseless as the complaining from the people who claim that tech workers are displacing them (from SF) by paying market rents. They don't have an unlimited right to rent in whichever neighborhood they want, and neither do tech workers.

If you work for a tech company in SF and want to save money, live in the suburbs: that compromise has always existed. Or if living in SF isn't your thing, go live in Minnesota and take a $90k job, but spend $1,000 on rent. Nobody's saying living in SF is unilaterally better here, but I really don't understand why it's considered inadequate for a company not to peg its compensation to the price of a 1BR rental, regardless of market conditions!

I noticed the same thing. The salaries are about 1.3-1.5x mine, but a quick search on Trulia shows rent prices 2.4x mine. Seems like a losing deal.

Not necessarily. If you're making $100K but your rent is $1000 your salary minus your rent will be $88,000. If you're making 1.3x ($130K) but your rent is 2.4x ($2400), your salary minus your rent will be $101,200.

Obviously, this ignore taxes but the increased salary can more than make up for extremely high rents.

But that's just rent. The apartments 2.4x mine appeared to be in worse neighborhoods with higher crime, worse schools, etc. than my current neighborhood.

And commuting is expensive. I have a 10 minute bike ride right now, there's no way I could afford to live close enough to SV to bike to work. It's almost enough to erase the rest of the cost difference. http://www.niallkennedy.com/blog/2006/03/silicon-valley-comm...

I'm not saying "Bay Area is still definitely better because, hey, look at my math". I'm just saying that a 1.3-1.5x salary increase can more than offset a 2.4x rent increase. Obviously there are other factors that are too numerous to list such as commuting costs.

They don't pay taxes in Bay Area?

   $100K/year - 35% - $1K/month = $53K/year
   $100K/year - 35% - $2.4K/month = $36.2K/year
   $130K/year - 35% - $2.4K/month = $55.7K/year

You aren't taking marginal tax rates into account. The tax rate you pay on the incremental 30k is higher than the average tax rate of the first 100k, which makes a significant difference.

Yeah, necessarily: a $1k rent on $8,333 a month ($100k a year) is 12% of gross income. A $2.4k rent on $10,833 a month ($130k a year) is 22% of gross.

The guy living in the $1k apartment land has a better financial life. (Also, good luck finding a place for $2,400 in SF right now that matches what you can get for $1k in most other parts of the country.)

Not necessarily. Many big-ticket costs do not depend on location. Student loan payments, car payments, health care, etc. tend to cost the same whether you make 3X or 5X your rent. You're going to pay them off faster in a high-cost, high-salary area than in a low-cost, low-salary area.

Wanna bet? Health care is more expensive here. Cars are more expensive here (to purchase, but more importantly, to maintain). Food and alcohol are dramatically more expensive here.

In fact, pretty much everything you'll spend money on as a normal adult is more expensive here. I actually can't think of anything that wouldn't be more expensive, unless it's something that's already an obscene luxury good, like a Ferrari.

Your only argument here seems to be that you can make a calculated bet to pay off student loans, because 78% of $130k ($101k) is larger than 88% of 100k ($88k). Maybe, but good luck with that: I think you'll find that the cost of living easily consumes the difference.

My assumption is that student loan payments are much higher than (or close to) your housing costs for most young adults. Compare:

$2000 student loan payment + $1000 rent, at $70,000 salary would be tough.

$2000 student loan payment + $2500 rent, at $140,000 salary is do-able.

I agree about the smaller "cost of living" items though.

No, because the absolute amount of money also matters.

Your example doesn't demonstrate that having a 1.3x increase in salary with a 2.4x increase in rent is necessarily a losing deal. And of course you can find a place for $2,400 in SF right now. Maybe you have to have roommates which is fine to many people.

The real question is how dev salaries stack up around the rest of the US. Bay Area developers have higher social status than their colleagues in other places, which (admittedly very anecdotally) seems to correlate with better pay.

Are there dev jobs paying, say, $150k in Chicago? If so, I don't see much advertising/discussion for them...

$150K is chump change in the financial industry (prominent in Chicago). But that is a weird/competitive market.

I'm not going to give my personal numbers, but that number is in line with senior compensation when I moved from VA in 2008. My gf recruited for SharePoint developers for the DC area - asking ran from 140K to north of 200K. This was a few years ago; I don't know the current market; I strive to stay far, far away from anything enterprise based.

You don't need to be making $150k in Chicago to be doing better than Bay Area developers. It seems like it's not uncommon for junior level developers to make $75k in Chicago, but 1-bedroom apartments only cost somewhere between $1k and $2k/month depending on what neighborhood you live in. And I'm not surprised you haven't heard about jobs in Chicago. People on HN seem to be pretty down on Chicago, which in my opinion, is a shame.

Are there dev jobs paying, say, $150k in Chicago? If so, I don't see much advertising/discussion for them...

Yes, there are. Not as many of them, but they exist.

My experience is that base salaries in Chicago are comparable to the Bay Area. It's probably harder to get a $75k+ per year RSU package, because the people who are at that level are more likely to be older and to work in finance for cash rather than RSUs of an illiquid company.

If you're in Chicago and look for good programming jobs, you should reach out to me (claes.bergryn at gmail) because I have some ideas.

You rather blithely move between talking about "San Francisco" and "the bay area," but they're different, and the ultra-high rents are much more a San Francisco thing than a bay area thing.

Presumably he knows that. Even still, traffic and commute from "the bay area" to San Francisco where most of the startups are located are not reasonable there compared to other parts of the US, even tech-heavy ones.

> other parts of the US, even tech-heavy ones

This is not comparable.

SF is unique among other "tech-heavy" environments around the US in that we reward employees with significant pre-liquidity equity here, and the chances are significantly above zero that those shares are worth something in many cases. When you factor that in, compensation comes out to ~$300-500k/yr.

In other areas of the US, even where you have a density of tech startups, the culture is entirely different -- compensation is attractive to a more conservative profile. Likewise, the companies that inhabit those economies are not targeting the same kind of aggressive growth that companies in SF+SV.

So to say that there is a choice between working in SF and, say, the research triangle, disregards crucial differences.

I'm not being blithe. Last I checked (maybe a year ago), the rents in the valley weren't substantially better than the city. You might get more space for the same amount of money if you're willing to live in Burlingame, but the monthly nut is similar. You also have to factor in the cost (and time!) of the commute, which sucks.

You can do a little better in the east bay, but rents for anything convenient to BART are going up faster than rents in SF. Basically, the bay area is an efficient market for housing, modulo the cost of commuting to the major job centers.

Don't forget the required car(s). Start pricing those in at $500/mo ea (payment, insurance, gas, maintenance, traffic tickets/driving tax, parking) and it's not clear you save much money.

A lot of people can easily get by with a bike, especially if they're taking Bart / Caltrain to the city.

Median 1BR rent in Oakland is $2000 per month (according to: http://blog.sfgate.com/ontheblock/2015/05/12/what-you-can-ge...). So, look, that's not cheap, but it's $1,500/month less than the median rent in SF that you quoted. The equivalent of an after-tax raise of $18,000 per year.

Yes, it's not in the city. Noted. But, you know, life is full of trade-offs.

Yes, I said you could do a little better. But rents over there are going up faster than the city, and the places that are convenient to BART are the most expensive.

Add in the cost of a car (which you need if you're living over there) and a daily BART commute, and you've easily added on $500-$1000 a month in transportation expenses. Again, housing around here is an efficient market, modulo the cost of commuting.

$1500 a month isn't "a little better." And Oakland is far from being a cripplingly long way out in the 'burbs.

Plenty of people -- most people? -- in SF have a car too, and no, you don't actually need $500/month for a car. And hey, it's eminently possible to live in Oakland without a car if you really feel that's a priority.

I agree with you: the market is efficient. It's efficient and filled with people who put a big premium on being near the hip areas of SF. If you have less money than those people, you can get more monetarily efficient by being willing to be farther from the hip areas of SF. If you have identical preferences to a bunch of other people making $100,000-$150,000 in an area averse to adding housing density, then... well, you're going to be bidding a lot for a limited supply of housing.

Look, you're preaching to the choir about not living in "the hip areas of SF". People around here have lost their minds -- they all want to crowd into the same 20-ish blocks of trendy real estate, and pretend that it's the city's fault when those blocks are expensive. But, I digress...

My point is that if a company wants you to work in SF, you should be demanding a salary commensurate with the costs of that lifestyle. Making an excuse for the company not to pay you is silly. Making a daily BART commute and living in Oakland is fine, if that's what you want to do, but you shouldn't be doing it because a tech startup won't pay you enough to afford housing near where you work.

> People around here have lost their minds -- they all want to crowd into the same 20-ish blocks of trendy real estate

It would help if more than ~20 blocks of San Francisco were conveniently accessible by subway. BART, MUNI, and Caltrain are woefully inadequate.

I recently looked at moving from SanJose to Mountain View (aka closer to Google). The rents fell off approximately linearly with distance to MountainView. If you put a dollar amount to the falloff for a 2 bedroom... it corresponded to approximately $50-75 per hour of daily commute time. So you're "paying" $50-75/hr to live closer to work.

Using Oakland as an example (2 hours of commute daily * 20 days), that's ~$2000 less in monthly rent compared to a comparable place in MountainView. Which is about right...

[Assuming you moved into areas that weren't themselves local hotbeds such as SF, PaloAlto, or Atherton.]

I would think that most engineers renting 1br apartments are doing so with a significant other. That brings the per-person cost down to $1750, or a minimum of $75k / year.

'To keep that at 30% of gross income (which is still pretty bad)'

I don't see why the percentage is what matters. I'd rather pay 50% of $140 than 10% of $70. Of course, taxes change the numbers, but that still doesn't make "percentage of income" be what matters...

"If you're starting a startup in San Francisco...well, don't do it. Unless your customer base is here, you should go somewhere cheaper."

The money is in SF, though. And the money has shown no interest in moving.

By "the money", I assume you mean "the investors". Most customers are not in the bay area.

Anyway, here's a startup protip: make a business that is growing revenue like crazy, and investors will give you money no matter where your offices are. Move to SF without a business that is growing revenue like crazy, and they probably won't give you money.

...but you'll be able to take a zipcar to Sand Hill Road for the rejection. That's worth something, right?

>make a business that is growing revenue like crazy

...so your protip basically amounts to "make money to make money"?

Thanks, underpants gnomes.

I think at this point those who locate in the bay area see getting VC money as success, and whatever comes after as resume padding. Anyone who is ready to build a real fast growing business is not going to go to the one place in the world where the costs are astronomical (except maybe for a small titular HQ with the CEO while the rest of the company is in cleveland or something). Everything is super expensive, and to be honest, there's a lot of investor money, but most of it I wouldn't touch with a 10 foot pole-- the cost of that money is astronomical as well.

Depending on what your startup is, a lot of your early customers are probably going to be in the Bay Area. But yes, I was referring to the investors.

"Anyway, here's a startup protip: make a business that is growing revenue like crazy"

Really? That's all? And I'm sure that to make my product better, all I have to do is write code with less bugs!

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