Stripe Will Pay Workers $20k to Leave New York and San Francisco
forbes.com
forbes.com
But - uh - I think a lot of people would be happy to keep 90% of their really high silicon valley TC if they moved to another region and they got a one-time $20K relocation bonus to top it off. I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area. That said - it only stays true if they stick with Stripe. As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back.
I see these options as really good offers for those who really want to temporarily move somewhere else, like the company/manager/whatever they currently work for, and want to come back to the tech hub in 2-3 years (new parents? young/childless married couples? someone who misses their friends "back home"? Idk). For everyone else, I don't know why you'd move away unless you were already planning on it anyway. Your savings will be short term gained and you will lose all your friendships locally. You won't likely get to keep that $400K+ TC by sticking with permanently remote jobs or by not living in a tech hub city unless you never lose your job. (Uncommon) For people who hated living in NYC or SF Bay Area then maybe this is the winning ticket to help them kickstart their jump into another region.
If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)
I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. I've had friends I met at Google Mountain View move to Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle, etc, usually to be close to family when they're having kids. You do get CoL-adjusted but 90% of SV salary is pretty typical. Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers).
> If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)
That's the case for most people who have worked for ~5-10 years at a Silicon Valley company. When 2009 hit I had a bunch of coworkers who joked about buying up whole city blocks in Detroit and plopping down a Google office and an intentional-living commune there. A lot of mid-career engineers at a FAANG could buy a house for cash in most parts of the U.S. and then have enough left over to retire, but choose not to because at that point they've put down roots in the Bay Area (and gotten addicted to the weather and culture).
Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1. On the other hand, I have met several people who started on-site but switched to working remotely later. I'm not saying it's not possible to do the former, but it seems like it's way easier to work remotely for a FAANG if you've already proven yourself, which obviously doesn't work if you have already moved to a lower CoL area and are looking for work.
The cities the parent comment mentioned (Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle) are all cities where Google has offices. So, the folks they mention weren't working remotely, but rather working locally in remote offices.
Source: Google San Diego employee
Source: know the people mentioned.
A lot of the people I mentioned above actually transferred PAs to make remote work work. If that's a goal of yours, Google's a big enough company that there's probably a role available.
The problem is that you need a VP exception for remote work and many VPs don't believe in it at all. So there are entire orgs where the number of remote people is zero.
I live in New York and like living here. I understand the cost of living here is high, but I also know that there are few places that can offer the lifestyle New York can. Given the option to keep most of my salary and relocate to a lower cost of living city, I think I’d stay in New York.
If you relocate from NY to a no tax state, but are still basically working for the NY office, you might be taxed as a telecommuter in NY and still need to pay NY income tax.
I'm not sure how this works for a multi-state company like Stripe, but I've had to do this when I transitioned to working remotely for a NY based startup.
It's easier to think of your "total compensation" without taking into account cost of living. Lots of people (esp tech folks) don't have a personal budget and don't keep track of their costs / expenses in nearly the same level of detail that they keep track of their income.
The conventional wisdom on HN (for people who aren't going to be founding companies) is that if you join bigco FAANGs and bounce around among them for 20-30 years, you'll end up with way higher expected net worth by retirement than if you play the startup lottery.
Part of this is because of the power of compound interest. You can get that engine started in your early 20s and pour a lot of your "spare" money into it, especially you don't have kids yet.
This same argument applies to lowering your costs. If you live in SF, you could easily be paying $40k/y in rent or $100k/y on a mortgage. If you buy in a small town with 90% of a bay area comp package, you could be plowing all your housing savings into the compound interest machine.
edit: $/y instead of $/mo
Definitely a good thing to do during covid times, but you might want to move back after covid is over.
Have you ever lived in a small town in, say, Texas for a month? Nearly everything is cheaper there, and not by a little. Gas can be $1.50/gallon instead of $3.89/gallon. Dairy, produce, meat are all cheaper. Utilities/energy is cheaper.
Maybe it doesn't have as big an impact if you don't have kids, but I only have three and man these things eat a lot.
And yes, the tax rate is progressive, but the average rate is still around 9% at that income level (~36k). Marginal rate is just over 11%.
My overall point is just that almost all of the cost of living delta in CA is from taxes and housing. Didn't mean to get too deep into the numbers.
Beef was cheaper. Chicken and pork were same as Cali. Produce was a lot more expensive; regular produce cost the same as organic produce in Cali, and the quality dropped off a cliff in the winter.
Gasoline was cheaper, but the only utility that was cheaper was water. Internet was more expensive. Electricity and (natural) gas was significantly more expensive, because A/C was a must in the summer and heating was a must in the winter.
Car maintenance was much more expensive, since the salt they use to melt the snow is corrosive. House maintenance was more expensive, because the humidity year-round meant increased mold growth.
In order to get cheaper than LA/SF, you had to move to a small town...but you can do the same thing in Cali too; such as by moving to San Bernardino or Sacramento, and you end up with a much higher quality of life than a small town in the Midwest.
In LA with a little effort you can find endless Asian/Mexican options for sub-$10.
Whole Foods drip coffee is $1 for prime members in many locations and is drinkable if not great.
The conventional wisdom (again) is to stay at FAANG and stay in the SFBA. You can also leave SFBA and work at smaller companies that don't offer FAANG comp, and it can still make sense because of the latter chunk of money (lower costs from housing and general CoL).
What specifically do you mean by “compound interest machine”?
How much would you have made if you'd invested in a FTSE index fund in 1990 till 2020?
Very little, as it happens. The reason everyone says index funds are great is because the US markets have done well historically. This is not a guarantee.
What metric are you using to say largest in 1960 though? Not disagreeing, just curious.
And of course market never recover.
you don't invest in just one region. You invest across the entire world, in all regions. You buy the entire market at market cap weights. This has been shown to have a positive expected return, going back over 100 yrs.
Also, at current interest rates, you'd need to save 65% of pre-tax income to have a good pension, so the likelihood of any of us having a decent pension is very, very low (modulo getting in early at a megacorp).
it's the best you can do. As the saying goes, past performance doesn't indicate future performance. However, it's the best guess you can make.
and has this been more correct than using historical data?
And the fundamentals and valuations are subjective - people value different aspects of a company differently. Who's to say your valuation is correct? This is the reason behind volatility.
But if you're buying a broad market cap-weighted index, the behaviour of the price is less affected by individual valuations and more affected by macro-economic factors. And historically, a broad market cap-weighted index has had positive returns. This cannot be said about individual companie's performance.
People have been saying "the markets are fundamentally changed and investing is dumb" for ages. Japan has been the single example people point to over and over and over. Meanwhile, other people are looking at 400% returns over several decades.
So the moral of my story is don’t move out of a high cost city for the money, it doesn’t add up. Move out for a myriad of other reasons that may be meaningful for you (family, life, etc)
Even your chain restaurants are more pricey. Everyone has to pay rent, ya know?
My wife and I both work remotely now. We need a 3BR place to stay sane because we need two offices. Compared to the south bay, we are saving >3000/m in rent. At a high compensation, marginal tax rates in CA approach 50%. So that 36000 saved is worth 72000 in TC difference.
It gets more dramatic if you pay for childcare. Childcare in the bay area can easily run 20000 more than it might cost in a lower cost of living area. A family of four that has two kids in day care might save 60000 just off rent and childcare differences.
On the other hand, for single people who would have a 1BR wherever they chose to live, the rent difference may only be 20000 and the rest of expenses don't change much and then suddenly dropping 20% on your 200,000 TC ends up being a bad deal.
Haha not exactly preaching to the choir here. We all are aware of what sacrifices we make and don't change course for those things.
Its always "lets see what it's like over here, oh cool mountains! oh cool, beaches, oh cool new IPAs" or whatever. Try not to get completely isolated with age and figure it out!
Edit: Total Compensation on an annualized, repeatable basis. Usually used in the context of compensation packages in the software industry with companies such as Google and Facebook.
Thanks https://www.urbandictionary.com/define.php?term=tc
Motherfuck
Please excuse a non-american asking a question, but doesn't this mean that no money gets paid into retirements as well? Or is that a federal tax?
Either way, it has nothing to do with a state-level income tax.
Any other federal taxes to the individual are insignificant or investment related.
[0] https://smartasset.com/taxes/california-tax-calculator#pfVHM...
Eg Australia and Singapore have mandatory retirement funds. In eg Germany, the money you pay for the government retirement scheme, just gets paid out straight to current retirees, ie no savings are made at all.
Well, considering most state pension schemes are also Ponzi schemes this isn't the case in only Germany. Norway might have an actually sustainable pension scheme?
The Singaporean CPF system is interesting, but perhaps similar to the Norwegian system?
On top of that it's strongly encouraged to make private pension contributions, from pre-tax income; I think this corresponds to the US "401k"?
There is also a lot more tax advantaged savings for the better off i.e. 20k pa ISA basically put 20k a year beyond the reach of income and CGT is just the start.
VCT's EIS and SIS for some one on a SV engineers wage for example.
Tax on share options is far more sane as well.
Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place.
Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.
Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well.
Everything is more expensive in a major city because everyone has more expenses and passes those on.
NYC, where I live, has an 8.875% combined sales tax. And a high income tax.
Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes.
Moving to Texas would cut the sales tax I pay.
Just an example calculation: If you can save $1000/month on rent and another say $150/month on other living expenses. that's $13800 annually. That's about $138000 annually net salary right now ($124200 after the cut) to break even, or about $180K-$210K pre taxes and pre cut, living in San Fran. Now, if you move to an area with lower taxes that break even point will only go up.
Insurance dropped from $120/mo to $50/mo.
Meanwhile, all these affluent people have to move somewhere, the properties in these places aren't going to stay cheap forever. So you can get a cheaper mortgage in those places to pay off a property that will rise in value.
Of course, that's all speculation. Prices in the "good places" are already high anyway, if you really want to strike a bargain you have to buy into the places that are still up-and-coming.
Or, as California is a non-recourse state, leaving the bank holding the bag, paying only taxes on the unpaid debt.
> Meanwhile, all these affluent people have to move somewhere
Well, they actually don't have to move, and if they do it may not be to where you predict.
I didn't notice this when I went there last year, is it a post-covid thing? What happened?
You have to look at it in terms of opportunity cost. What else could you have bought for that money? If prices rise in SF only because of inflation, prices rise even faster in those places where there's a real increase in demand.
Yeah, but the out-migration is largely at the low-end of the economic scale; with net in-migration at the high end.
And on top of that, they may have to accept a non-compete clause in their employment contract.
All in all, they have a pretty strong incentive to remain a Stripe employee as long as possible. Stripe probably likes this.
I get that a 10% annual salary hit is larger than $20K for a lot of people, but the cost of living in these areas is over 100% larger than most other cities in the country. I would take that deal in a heartbeat.
Although the above is not the only factor. Obviously there are things like weather, geographic amenities, politics, etc to consider.
I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems.
If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary.
I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis.
That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise.
Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power.
For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world.
Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.
With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad.
I did the math and owning is cheaper than renting in just a few years.
This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.
And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.
And California has relatively dry mild weather.
And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+.
Chance of needing a rebuild are very, very, low.
So, I know this is stupid, but moving, getting 20k, and taking a 10% salary hit would piss me off, even if I essentially became "richer."
That's not so weird - many CEOs work that way.
Does that include your car, tech gadgets and vacation dollars?
I'll believe it's zero the day the Collisons themselves leave SF.
If I moved from NYC to St Louis I could take my rent payment and go buy a house. I’ve upgraded but my housing expenses are the same. Then if I wanted to move back to NYC I would need to double or triple my income to purchase something relatively equivalent. Or I could just move back into my old apartment.
The actual costs on the ground for most people are going to be way more similar than these COLA calculators will show. People won’t live their exact same lives with the exact same luxuries.
The biggest actual difference is taxes.
However, the big downside and risk here is that you’ll be living in St Louis with an SF salary. You will not find a similar salary in St Louis. If you want to quit your job and maintain your standard of living you’re left with some tough choices.
I love living here, don't want to move to SF... I think with more remote work we will see companies leveraging talent in places like St. Louis. Probably easier than paying someone to leave.
That said, I’m happy to tough it out here and potentially take advantage of not having to compete with as many other techies and private school kids for rentals in my neighborhood in SF.
In your example, it would be Nevada.
I've got to think well-paid software folks are going to look at the $20k and scoff. I know I'd be underwater on that deal in less than a year.
On the other hand, administrative folks, HR, etc ... they might see it as a more appealing deal.
I wonder if there's some sort of ulterior motive here for Stripe?
I didn't read the article and thought it was a bonus. If it's relocation costs, that's an even worse offer than it sounds. The company will probably save that much money in the first 2 months of the employee leaving NYC and the Bay Area.
EDIT: I didn't know about the 10% pay cut. That's what I get for not reading the article.
However, if the employees move to smaller markets they presumably have fewer employment options and less bargaining power in the future. So the company will save money over the long term too.
It might be possible that you start off at 10% less, but the people in the Bay end up getting higher raises than you do and eventually you lose a lot more than just 10%.
In the longer term, it depends on raises. Historically a big cost to moving to work remote in a low cost of living area is receiving much stingier raises indefinitely. I suspect that will continue to be true, though who knows.
And the answer is almost always that if they had an income tax nobody would want to live there.
As someone who lived on the East Coast, the Midwest, and Nevada, I'm surprised by this. Could you elaborate further?
Nevada is the middle ground of a lot of these places. You have mountains if you like snow, you don't have to deal with snow (ever) if you don't want to. You have pretty good infrastructure if you want to work remotely, you can fly to LA in 45 minutes if you have to for work. (I'm convinced there are instances where it's faster to commute from Las Vegas to LA than from...outside of LA to LA). Typical commute time in Las Vegas is probably on the order of 15-20 minutes. Under normal traffic conditions you can make it from one end of the city to the other in 45 minutes or less.
Socially, there's less politics here in general. Less of the NIMBY folks pushing for poor policy and zoning. Less protesting/rioting/looting. If I had to guess, the average person here owns a firearm, but nobody ever really seems to notice or care. Crime is comparable to California overall but there's more places in LA that I would put on my "never go to" list than in Vegas. And, while we definitely have homelessness, it's substantially less than when I was recently in LA.
With all of that having been said I think the most important thing is cost. My fiance, at 22 (and with no college degree) makes 17/hr doing admin work for a local construction company. She just bought her own house and is living comfortably. She did that without any financial assistance from me, or her parents, because it wasn't necessary. Her mortgage is under 1k/m for 1800(ish?) square feet of a reasonably modern house.
>I think the most important thing is cost
I completely agree, where I live houses aren't exactly cheap, and we have high state property taxes. It gets even worse if you move towards the local college town which has seen a huge bump in housing prices along with additional property taxes added on. It's a shame that western NV doesn't have more UX jobs, but at the same time, remote work may change that.
Maybe before covid. I am not so sure anymore though.
This is anecdotal, but for reference, I am going to save 1k$ a month on rent for my 1 bedroom apartment, when it renews.
I’m very remote from this situation so please excuse my ignorance.
Many of my friends moved back to their hometown to be near their parents as well. It's much cheaper and probably a once in a lifetime chance to really interact with your parents daily after college.
In 2016 I lived in adequately nice 2 bedroom, 1.5 bathroom apartment in Ames, IA (home of Iowa State University) for $820/month before splitting with my roommate. Internet, cable, and water were included. The highest end apartments I heard of in town were ~800/month per tenant in 4 bedroom swanky apartments right across the street from the university.
Obviously total comp can more than offset cost of living differences, but the difference in cost continually blow my mind.
It's a reasonable deal. Just removing the need to drive into SF 4-5 days a week is worth 10% of most people's paycheck. You'd only be underwater in terms of the top-line, once you consider expenses and time lost to commuting, you come out way ahead even without the $20k for relocating.
so someone making 400k total comp may only make 160k in salary and so the cut would be 16k. (4% of total comp)
But california state income tax is also 10% so it could cancel out.
https://blogs.worldbank.org/education/who-trains-best-comput...
> The United States trains the best computer graduates ― by far: We find that CS seniors in the United States substantially outperform seniors in China, India, and Russia. The average computer science student in the United States ranks higher than about 80 percent of students tested in China, India, and Russia. Seniors in elite institutions in the United States similarly outperform seniors in elite institutions in China, India, and Russia by approximately 0.85 Standard Deviations (SDs). Importantly, the skills advantage of the United States is not because it has a large proportion of high-scoring international students.
I've seen kids straight out of highschool who can write solid stuff and know git back to front compared to some lad with an Ivy league bachelor's who is basically clueless, needing his hand held for months and yet demanding 8x the wage.
I treat everyone who only has a degree and no real world skills with a lot of suspicion. There's plenty of ridiculously good hires out there.
“Hey everyone, let me introduce you to the wholesale replacement technology staff we obviously hired just to pay them way unfairly less and fire all your friends who did a good job. It may be night time every time you see them on the video call but don’t worry. As you capitalize on a near indentured servant relationship with them so we can pay them less than their worth purely because of geopolitical arbitrage, they’ve generously agreed to never read their kids bedtime stories or sleep at the same time their spouses do, as they live out a stereotype hellscape of Western arrogance where they are happy to be worker ants endlessly reciting Bill Gates’ “flipping burgers is opportunity” speech in their heads.”
Among the big consequences: you lose R&D tax credits. The language and skill barrier is also pretty big; most companies that outsource end up spending so much money on QC that they barely save anything at all.
It's theoretically possible to find good programmers in the Philippines as opposed to locally. But seeing as how finding local programmers is still not a solved issue, expanding the job pool to include the entire world isn't going to make that task any easier.
Aren't those negligible compared to the salary gap?
Probably true, however by then they will already have made the decision and it will be priced in to the company’s stock. The System is replete with the consequences of bad short-term decisions that have become more or less locked in.
$200k vs $<20k. It’s an extremely large gap to be filled. Surely the people who spend their days looking at numbers on spreadsheets will see this gap and try to take as much advantage of it as they possibly can, and surely the market will reward the massive cuts in operating costs.
There will always be companies who need to learn on their own how $20K developers are different from $200K developers and what investing in either means 10 years down the road.
By the way, good developers with good English and good communication skills can easily earn MUCH more than $20K even today by working remotely. Already today in most countries there are almost no barriers to earning multiples of their national averages other than one's own skills and attitude. And yet dev salaries in America are as high as ever.
The industry seems to be growing faster than the labour force even despite globalization, and I don't think that trend will reverse anytime soon. We're still shoving software into more places, industries, and processes, and making it all more complicated.
They've made it pretty clear that they won't be looking for local programers. They're looking domestically. Presumably, the same processes used to hire remote domestic programmers will be equally applicable for most remote non-domestic workers too.
Knowing that the market is getting even more global it only encourages me to ask for more money, not less.
[0] measured in years of xp.
Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
I meant that "location adjustment" just increases the gap to the already existing gap made of "attractive place(big city) - bigger companies - bigger salaries" factor.
>Up here in Lithuania, in IT, it's not uncommon to live (relatively) bumfucknowhere, work remotely and drive in once or twice a week.
I'm not exactly aware of how common it is here
During my time there a typical project would have 30-40% of the personell living either in a small town or in the middle of nowhere.
And how long is the commute into the city?
I think this is how it's going to be in America soon.
Commute varies a lot depending on specific location. Want to live in a village in a national park? You're looking into at least a good hour off-peak to two hours including city traffic. Random small town? May be an hour, may be two. If you want to stick close to your parents and they happen to live deep in backcountry... You may be looking into 3-4h one way depending on which city the company is located in.
1-2hrs is reasonable for a shoot into the city.
I think this will become very popular.
In other words the question is, “Given that contracting and outsourcing are deemed to be worse options by rational actors, what reasons make this true?”
If your tasks are so well defined that a single feature request ticket can be fulfilled and satisfied on the first try, that’s cool but you’re likely not actually doing anything challenging and you’ve probably already outsourced to India.
Maybe my clients and I got lucky because little hands-on management was required and specs were quite lax? But at least in some cases it works just fine.
If they are equally productive, then surely they deserve equal pay.
Applying the current exchange rate and American standards regarding time off I'm currently making, as a front-end dev with 8 years under his belt, $60k+ before taxes in Poland, and I'm far from the highest earner among my peers.
Sure it's considerably less than the median US wage in this field, but still it's not like we're orders of magnitude away from you guys.
And note that Poland is a very popular destination for outsourcing.
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
That's the point of the $20k, to cover the move. The deal is to keep your job at 90% of your salary while potentially living in a place that is only 75% (or less) of the cost of living as SF/NY. Get yourself a nice big place, some indoor/outdoor breathing room, etc.
I would not be shocked if next year the people who took this deal were not given raises as high as Bay area employees because "lower cost of living".
Your 150k/year engineer is going to net about 100k, dropping it to 135k/year will have a net of about 90, so round numbers call it a 10k "loss" after taxes on income.
So if they save 1k/mo in expenses, they are ahead 2k a year net. I've made moves before that shifted my monthly expenses far more than that.
It's not obvious there aren't win-win version of this.
Effective tax rate for a single earner of 150,000 in NYC with no extra deductions is a bit over 32%.
Remember that the before-tax delta here gets applied at the marginal rate, so it's always going to be knocked down a fair bit for higher earners; the net impact will be smaller.
Anyway I assumed above leaving NYC for somewhere else in NY. It's easy to come up with scenarios where you might actually take home more with the pay cut (e.g. SF, CA -> Houston, TX). Housing costs there would be way lower (less than 1/2?).
The word “rate” is important here.
https://www.levels.fyi/company/Stripe/salaries/Software-Engi...
How do you come to that conclusion without taking COL into account?
Only if you live in a van, by yourself. Most of that money is going to a landlord, or the bank.
There are quite a few reasons you could decide to do this. Huge promotion for your partner (it's great that we make so much money, but there are plenty of people with higher earning potential than us, and you might have married one.) Ill family member. Pulmonary disease. In-state tuition for your twin children. Continuing education, or plans to switch careers or retire in a few years. All of these may end up being cheaper for you than the $15k a year you're losing.
They aren’t suddenly less valuable to you. Their impact on revenue hasn’t suddenly changed.
I would never accept such a deal. Whether I am moving to a lower cost of living area or not, that is my business and none of my employer’s business. My employer and I have an agreement about my pay based on how they value my labor and how I value my time. I am looking for raises not cuts. And raises are a function of my impact on revenue. Whether I live in Manhattan or Madison utterly plays no role in this, full stop.
This very likely would be a reason to leave a company, or never consider working for them in the first place.
It'll be interesting to see how that holds up after this is over. How many of the large employers will continue to allow work from home, or at least not work from SF?
As far as popularity, it's totally random. I'll start with the Sofitukker stream in the morning, and just follow the raids all day. Some of the DJs will have a few 1000 streamers, and some will have 50.
After a while Twitch starts suggesting channels. Looking right now at all the suggested channels, they range in viewers from 60 to 808.
My friend's shoebox apartment was $3300/mo which he renewed for another 13 months for $2200/mo with 2 months rent free.
However, more residential neighborhoods have seen rents drop by only a little bit.
- https://www.zumper.com/blog/zumper-national-rent-report-octo...
I could see it making a lot of sense for the rank & file engineer who just wants to close their JIRA tickets and go home to their family, though. And that's really the economically rational part about this: it doesn't make sense for those jobs to stay in the Bay Area when they can be done from anywhere, by anyone with baseline software engineering prowess. Over the last decade SV tech companies have grown more and more of these roles, and it's good for both the company and the worker if they can do them from areas where housing and CoL isn't so ridiculous as the Bay Area. (Not as good for the worker when the company discovers that folks in Pakistan, Thailand, and Czech Republic can do these jobs just as effectively for $30K/year, though.)
In the middle of its growth, I had to move, and ended up becoming a remote engineer.
Since the acquisition, all my colleagues (who all started at the same "level" as me) have greatly surpassed me in terms of title, responsibility, and salary because "they were there".
I'm not upset or anything, and in fact happy we all won in our own ways, but just echoing the idea that being nearby matters for career advancement!
Company starts to push employees to work remote from anywhere. It sounds great and it is great for as long as you keep and enjoy that same job. Once you move into the boonies, company knows they have leverage on you. You can no longer ragequit on Thursday and start at a new place with a better salary next Monday. You'll be forced to hold on to this job even if it turns sour. Or what if there are layoffs.
Then you're stuck in the boonies with no other employment choices other than compete for other remote jobs at a much reduced salary now.
Moving back to the Bay Area is very difficult if you sold the house when moving out.
TL;DR: Only move for personal reasons, not for company incentives.
In any of the 50 biggest metro areas in the US, there are employment choices for programmers.
Everyone I know who took these moves went to places like a large farm out nowhere, or a cabin deep in the forest, or to a small village in the mountains or on a faraway beach. Places which defined paradise to each individual, with wonderful quality of life (but no jobs).
Personally I was very strongly tempted to move to Kona (Hawaii) keeping my full silicon valley salary. Not exactly a hotbed of replacement tech jobs though, so I guess I'm glad I didn't.
I guess there is a tendency to overreact and think, "I want the exact opposite of the Bay Area", when what you really want is cheaper rent and a tad less shit on the sidewalk.
Some people could definitely make that work. A move to a no income tax state with low COL could come out very ahead. Of course, the career implications could be more negative than it’s worth, but there’s a reason why back office / administrative / operations staff tend to be easier to move to a different state relative to technical talent, which is more densely concentrated in fewer regions.
In CA, property values are sky high to begin with and you have to pay property tax on them, but if you buy in certain areas, you stand a fair chance of your property appreciating by 10% or more per year.
Elsewhere (Smalltown USA), property values are 1/10th what they are in those same areas of CA, but you generally can't expect anywhere near the same appreciation on the property.
So what, do you consider the appreciation as "inflow" (vs "income" because it's taxed differently when you sell) and take it into account when you are doing retirement planning? You definitely could, and maybe discount the appreciation by some pessimism factor to account for some possible future situation where housing values get get in half.
For me it's a lot easier to think about if I just live somewhere where a house in 30 years will (inflation adjusted) cost very roughly what it does today.
Probably a really good plan for the companies though: great way to have a loyal workforce that won't switch jobs for a 10% pay bump.
You could go -10% now but get it back in n amount of time. Still "behind" in a sense, but potentially ahead if you move to a low col area. I pay for a whole house in north Atlanta with less than people pay for an apartment in SF (houses also build up equity).
Would those also be CoL adjusted?
I was offered this "choice" back in 2013. Despite the fact that I (and my co-workers) were almost completely remote already, we were told that if we didn't relocate to Tallahassee, FL from NYC and accept a 20% pay cut, we would need to find new employment.
Even worse, should we accept this "generous offer" we would be guaranteed employment for 12 months (presumably long enough for them to find and hire locals who are compensated less, then have us train them).
I did the math and while I could certainly save on rent, the costs of an automobile, its fuel and maintenance, including insurance made the transition close to a wash for me.
I'd also point out that NYC is a wonderful, urban place to live. While Tallahassee is a typical sprawling, suburban place with limited (although more so than some other parts of Florida due to UofFL and it being the state capital) culturally diverse stuff.
I chose not to do so (as did all but one of my colleagues -- who did so at great personal sacrifice to make sure she could continue to support her family) and haven't looked back.
My experience is that such plans tend to be a salary dump by the company, made worse by the ability to slowly replace those who relocate with much cheaper local resources.
Why would you want to uproot your life (and that of your family, if you have one) just so you can be replaced by someone cheaper in the not-so-distant future?
That's not to say such a plan isn't a good thing for some people, but I found it to be not worth it.
People are calling this out as the company taking advantage, but it's a least plausible that it's win-win for some employees.
So you're on 150k in SF say, you move to, I don't know some small city in Texas, you get 20k to move, you make 135k a year and your cost of living has probably dropped by 70%. That doesn't sound like a "scumbaggish" move to me. That sounds like a company trying to entice it's employees to get out of the crazy expensive cities.
This is incorrect. Workers are paid massive salaries because those same workers have an option of going to other employers who are willing to offer massive salaries.
That sounds like circular reasoning to me. What's the base reason for employers offering massive salaries?
Edit: If you continue down the road of reasoning, the desirability of an employee is related to how much net income the employee contributes to. The employer is betting that the work a specific programmer does will be integral to yielding billions in profit, so a few hundred thousand is a no brainer.
In contrast, a hotel on a desirable piece of land does not need to offer housekeepers massive salaries even though the work the housekeepers do is integral to the hotel's profits, because the housekeepers individually are more replaceable than a programmer.
Edit #2:
Note that doctors get paid more in rural, low cost of living areas than in high cost of living areas.
Attacking the messenger because you have no rebuttal. Also, it is ridiculous reading comments that have the sentence structure of a person still in primary school.
[0]: According to levels.fyi - https://www.levels.fyi/company/Stripe/salaries/Software-Engi...