Perhaps the real message here is that SV companies are realizing this is a perfect way to get out of paying $300-500K salaries for jobs that are more like $150K anywhere else in the US. It's kind of like the outsourcing craze from 15 years ago, except instead of getting 3-5 developers for the price of 1 by going to Europe or Asia, SV companies can get 3-5 developers for the price of 1 that are still US-based and only a couple of timezones away.
As someone who doesn't live in California but still near a big city in an area that is still "expensive" (but nowhere near SV prices) relative to smaller towns and rural areas, I can't figure out if this remote shift is a good thing or bad thing for me yet. I fear that my suburban house will be worth less going forward because proximity to a major city may be way less valuable now if so many fewer people ever physically go into work anymore.
I will agree that they are inflated relative to other professions, but that just means for them the earnings gap is even greater. (https://www.commondreams.org/views/2020/01/21/if-worker-pay-...)
https://insights.dice.com/2019/07/10/how-much-tech-companies...
Now, we all know there's many reasons for that, including competition and housing costs. My point is that salaries are so much lower almost anywhere else that FAANG could offer half of what they do in SV and get the best of the best in an area because it would still be a huge premium over local rates. The question becomes: if Facebook could hypothetically switch all its employees to other parts of the US and pay them top dollar relative to the area, would they still be earning $600K profit per employee while spending considerably less on salaries? Prior to C19, FB needed to pay those rates to be able to attract the best to the high COL area in SV because they felt a strong need to have their employees co-located. If FB has proven to themselves that they can have their employees WFH permanently without any significant productivity loss, then naturally they will no longer care about having to attract people to the Bay (and by extension they wouldn't need to offer those kinds of salaries anymore).
But maybe I'm all wrong on this. Who knows.
A couple of things are being conflated.
SV housing costs are astronomical so some companies pay inflated salaries to at least somewhat compensate.
Certain large tech companies are willing to outbid essentially everyone else to get the people that (they think) are the best.
I'd argue it sort of has played out. A handful of companies are willing to pay almost anything for the people they want, especially if they're located in SV. Pretty much everyone else has shrugged their shoulders and moved on. And it works because 1.) Hiring is a very inexact process and 2.) Not everyone want to work for one of the big tech companies for various reasons.
Chicago with an actual winter will likely never have the demand that California with it's year-round outdoor weather will have.
If costs were completely identical, would you rather live in Illinois or the Bay? How many other people you know would say the Bay?
I can honestly tell you that out of all the people I know, I can't think of a single one who would move to the bay area even if the costs were the same. Weather isn't everything.
Is it really possible to get the same talent and skills?
If remote work is an option, then paying high rents just doesn't make sense.
Moreover, as this trend continues, the ultimate outcome is not US workers moving to low-cost locations, it is foreign workers supplanting US workers in extremely low cost locations.
> If remote work is an option, then paying high rents just doesn't make sense.
I live in NYC because I like NYC, not because the pay is higher. I took a net pay cut after rent, taxes, etc after moving here from Maryland, in spite of getting a substantial pay rise. I suspect that's not uncommon.
> the ultimate outcome is not US workers moving to low-cost locations, it is foreign workers supplanting US workers in extremely low cost locations.
This was already on the table. Generally speaking, you get what you pay for.
Right, but now companies are a LOT more comfortable with it than before, and have the tools, the management training, and the executive buy in to accelerate this.
Those that aren't in SF already can't afford SF talent so it makes little difference.
It's not like there's some glut of companies out there paying Chicago wages to most employees except for their 1 or 2 in SF who get a HCOL bonus. And to the extent that there are companies doing that, perhaps it wouldn't be so bad for society if they stopped.