Silicon Valley pay cuts ignite tech-industry Covid-19 tensions

... for a while, but then theoretically there would be a massive amount of economic growth.

Of course that only works if people all do the free trade thing. US/China broke down because the US was globalist and China was nationalist and protectionist.

That's not clear from a historic point of view. In general the more participatory the economy, the faster quality of life improves overall.

While wages may drop for the west, that should be more than offset by the rate at which goods and services become cheaper and more plentiful. Protectionists often look at only one side of the equation.

Would be? Look at the manufacturing sector in the US since outsourcing started. It's an absolute shadow of its former self in terms of people employed and salaries.

Developer jobs need strong English, not native English. And with remote work becoming more of a thing they'd need strong written English, which is an easier threshold for lots of foreigners to clear.

I think devs (not just devs, everyone) should save aggressively for rainier days. If it's not offshoring it could be automation or just plain ol economic downturn that could kill scores of jobs in the coming decades.

Well, even in Canada / UK / Australia / Germany software developer salaries are about 50% less than in America. There's nothing in terms of workforce education or productivity dictating companies should pay the American 2x more. Offshoring is difficult for small companies to do (taxes, accountants etc) but any unicorn startup has the means to do it.

Yes but that's part of the equilibrium I suppose.

Places where current wages are low are going to see wage increases (because of higher demand / lower supply), which in turn will lead to an increase in costs of living.

Places where current wages are very high are going to see downward pressure on wages (because of lower demand / higher supply), which in turn will eventually lead to a lowering of costs of living.

Obviously that's valid in the "fullness of time". How long it can actually take for this new equilibrium to be fully realized is anyone's guess.

Some but not all. There is still an advantage to locality (near VCs, technology events, ease of meetups, local talent pool).

Companies were definitely overestimating the need/benefit for this locality but that doesn't mean it is now zero.

If you're not in a place of privilege life is politics.

A old co-worker of mine couldn't get permanent residency for their legal partner. As a result rather than staying in the US they both moved back to Canada.

Honestly I don't blame them, sometimes I wonder if the US survives in spite of our political policies instead of because of them.

I would be curious to hear if the parent to your comment was talking about politics. They might instead be talking about the response to Covid-19, and the much larger death toll per million people in the US compared to Canada: https://www.vox.com/future-perfect/2020/9/9/21428769/covid-1...

Which, to be fair, is partially due to US politics. In that sense, making the choice to live in the US is letting one's life be run by politics, just in a different direction.

Making such a decision doesn’t mean politics is running your life. What kind of society, part of which includes politics, you want to live in matters to a lot of people. For me the biggest luxury of working in tech is actually that pretty much anywhere I earn enough to be solidly in middle class which give me the freedom to weigh other aspects of work and life higher. Chasing higher compensation or climbing corporate ladders is more optional.

Voting with your feet can well be an apolitical stance.

We're living in the age of Trump. You may not be interested in the dialectic, but the dialectic is interested in you.

Fine, I'll bite: that is what people are referring to when they refer to "privilege". Politics has an enormous influence on just about every problem you might face, from whether you're paid enough, what "enough" is, how easily you can bargain for more, to the freakin' weather, and thereby food supplies, to whether your neighbour would face consequences for shooting you, or how easy it is for them to do so.

Either you don't realise how your problems are due to unfavourable (for you) politics, or you have very, very few.

If I were weighing these options I’d just move to the expensive place, make the money, and then spend it later in the cheaper place. Moving for a job doesn’t mean moving for good, and your money works anywhere.

This for Vancouver. Here I’m at 100k cad. In Seattle I would be at 120k usd. So 50k usd difference

I think you’re being too hard on Europe. There are tons of smart people on the Continent working on unique and interesting startup ideas. The only thing Europeans may lack is access to funding and resources.

BC income tax as well as federal income tax[1] by way of transfer payments from the federal government to the provinces specifically designated as being for health spending (the carrot&stick the federal government uses to regulate health care across the country).

Specific fees or levies for health care in canada are a drop in the health spending bucket.

([1] federal spending and taxing is more complicated than this and they are not coupled in the same way provincial spending and taxing are but that's not super relevant here)

I think it ultimately comes down to the decisions of the marginal worker. Most people are not indifferent to where they live. In the Bay Area, as long as the tech industry continues to grow at a rate faster than new local graduates, you have to pay people enough to convince them to migrate. Since the cost of living is much higher, they will demand more to move. In senior roles, many employees will put more of a premium on being able to afford a decent house and be less willing to live with roommates or in a tiny apartment, and so you see the rates for senior employees are much higher in the Bay Area.

You can shop around for 529, to find the right rate/plan. I got mine in MI but I don't live there

This is definitely what I would consider as an edge case (at least I'd assume so). I agree that 30% seems aggressive but something like 10-15% seems more normal imo.

> Not only does a an employee's location not change the employers' demand, the moving also does not change the supply available to employer. Moving or not, the employer could always find a new employee abroad if supply was indeed plentiful.

The company tolerating remote workers changes the supply to the company.

The people moving immediately are seeing the first effect here, but if it becomes permanent, the people who don't move will inevitably get the same paycut. Why pay $200K for someone in SF when someone in Des Moines will take $140K, but wasn't willing to relocate five years ago?

> You're not understanding the demand side.

I think I am understanding it, but you are merely repeating your points without addressing the economics that I am pointing out.

> Indeed there is. It shows that the value gained by the employer is at least that of $200k+.

Yes and so the value you generate for the employee puts an upper bar on what salary you can command, not a lower bar, which is what you seem to be implying.

> Not only does a an employee's location not change the employers' demand, the moving also does not change the supply available to employer.

It increases the supply available, because today, given the investments Google has made in setting up offices for ~30000 employees in the bay area, they have to fill that demand using employees located in the bay area. They don't have to do that if they can hire from anywhere, so the supply increases.

> Moving or not, the employer could always find a new employee abroad if supply was indeed plentiful.

And they do! Google has employees around the world, and surprise, they do not get paid as much as they would have gotten paid in the Bay Area. Why is a Google engineer in Bengaluru who is hired by the same hiring process paid 1/3rd of what they'd get paid in MTV? And to preempt the usual HN racism against the quality of Indian engineer, the same Google engineer would be paid the MTV salary if they moved to MTV. This is not a hypothetical, this is literally what happens to the countless Google engineers who transfer from BLR to MTV.

Based on your logic, why is that engineer NOT paid the MTV salary today in BLR?

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I mean I am not even making a far-fetched claim. Bay area salaries are the highest in the world. They have to move down towards the average if some other salaries are going to rise because the engineer who lives in Randomville Alabama didn't have a Google office he could commute to and hence wasn't in the supply pool, but now is, can now compete for the Google job.

They're paying for the benefits still, but unless a certain % of SWEs go remote, there's diminishing costs per SWE to provide the benefits. You have to consider the scale the benefits "get provided at."

At a certain point, it costs the same to feed premium salad to 500 engineers as it does 575 engineers (no idea if this is the math, but conceptually yeah). A cook can make 600 or 700 gallons of soup without much difference or new purchases required: huge vat of soup is 2/3 vs. 3/4 full.

If the % of remote engineers hit a level such that cooks have to buy new soup bowls, idle hand cooks, or offices with cavernous empty halllways, then yeah, you're back under diminishing costs/eng and need to scale down.

Honestly i gave up on finding whole foods quality produce there (meat and seafood specifically) but yeah other than food it’s cheaper now

I think a lot of the cost of living calculators assume you won't downgrade your living situations with roommates, smaller living spaces, etc, so there's a lot of situations like yours where expenses don't scale the same way someone who wants to live in a similar sized single family home in both areas.

Yes I presume you have to report your location, and risk being fired if you aren't truthful.

Because they don't want to hop jobs. Walking away from a transaction is the signal to the buyer and seller that there is something wrong with the price. If neither party walks away, then there is nothing wrong with the price.

Maybe they aren't in quite as high demand as they were a year ago? I would be surprised if there wasn't some softening of the market in the pandemic.

Parental leave, vacation, healthcare, retirement, are all typically better in other developed countries. I, like you, get paid a heck of a lot more than my friends in those countries, but if something happens to me (say I get caught up in a mass shooting or get cancer like most do) I'm going to be on my own (gofundme?). We're ruggedly individualistic to a fault.

Ultimately, I think we agree though, since you're saying it would be a net positive. The options you mentioned (taking unpaid PTO) are possible, but there are many employers who would then see you as unreliable (unless you're top level in terms of skill).

I also think it takes a great deal of privilege to say "I can negotiate so who cares". While I agree with you that negotiation is important (it's how I got my current salary), you should think about those who come from poorer / less secure backgrounds. These people often don't want to blow their chance, so they take whatever offer comes their way. It's kind of a "rich get richer" thing, where those with confidence (growing up with a well off family, hence a safety net) are the main ones negotiating. Do not underestimate the importance of a safety net when it comes to negotiating, even for yourself. One thing that keeps me at my 9-5 job is knowing I need healthcare and a place to sleep with electricity (I have a lifelong genetic condition, sleep apnea, which untreated will result in my untimely death). My family is abusive, narcissistic, and unreliable. Being so incredibly on my own, I'm extremely risk averse. I imagine others, who might need insulin or some other thing would be the same.

So ultimately, I find the "just negotiate" line to be at best naive, at worst unempathetic.

Exactly, I would be willing to bet a lot of these folks would be upset / embarrassed if they knew the a coworker they thought to be below them was in fact commanding a higher salary. Thing is, it's likely to be true.

You don't get paid what you're worth, you get paid what you negotiate. But the ability to negotiate is a privilege. I go into this a bit more in a sibling comment.

> The whole temporarily embarrassed millionaire, individual exceptionalism, hero worship is a quintessential part of American culture, one that definitely helps employers in their price negotiation with employees.

Which is ironic, because the same SAG-AFTRA that negotiates multi-million dollar contracts for movie stars is the same union that represents background actors and actors in infomercials.

Here's a reminder of relatively recent history:

https://www.inc.com/suzanne-lucas/did-steve-jobs-lower-your-...

In any case not everyone works for FAANG, and even those that do can suffer unfair termination, various forms of discrimination, or other issues.

The reality in the US that productivity has outstripped wages since the 70s. This has been a huge and tragic net loss for general prosperity, because when wealth is concentrated and workers deal with debt and rent-seeking - from college loans, healthcare, high property prices, and others - the cost-of-entry for a viable small businesses becomes unreachably high.

Startups are not s substitute for small-but-profitable small businesses, some of which have the potential to become much larger businesses through genuine organic growth rather than investor goosing.

Unionisation isn't about your personal circumstances, it's about everyone's personal circumstances. Part of it is about keeping wages high precisely because this gives smart creative people to build new businesses if they choose to.

And before someone says "But what about wage costs?" - remember, you are paying inflated costs anyway, but with no benefit. You're paying them to people who tend to be extremely rich already - health insurance companies, banks, landlords, property speculators, and financial speculators.

If you pay them to workers you get the Fordist model of increased general prosperity with more people with more money being able to afford - and create - more of everything.

We gotta realize the interest of managers is to get us to work more for less. That being said if you wanna talk about specific policies union workers have better pay and benefits, and have better work places, not to mention gives us a political voice.

Even in that case, labor organization might help you keep a larger percentage of the value you generate for your employer than you otherwise would.

Don't forget

- Unions often ignore individuals because "the majority aren't affected by that scenario"

> - Unions add more politics to an already increasingly political environment. I don't want to spend an hour or more every month in a meeting to vote on stuff I usually don't care about.

Would you prefer these decisions to be made unilaterally, without any input from you? Because that's the status quo. If you are happy with these decisions being made unilaterally, don't vote. If you aren't, you have more of a lever than you do without a union.

> - Unions cost money, and while 200$/2 weeks (which is what one big union in my country charges) might seem reasonable to you, I don't like being forced to do anything.

I'm assuming most of that money is going into a strike fund. Having a strike budget makes your negotiating position much stronger, just like how if you don't live paycheck to paycheck, your negotiating position is much stronger.

If most of that money goes into administrative expenses, you may want to consider voting to reduce those expenses.

> Unions make it harder to fire under performing employees.

Unions require management to follow a process to fire employees, under-performing or otherwise. My wife worked in a union for 8 years, and plenty of poorly performing employees were fired during that time. The difference is that they weren't fired arbitrarily. You'd appreciate protection from that, if you were to ever be fired for political, personal, retaliatory, or just purely fabricated reasons.

If your management can't figure out how to document how an employee is underperforming, and to give them notice to shape up, I'm not sure your management can be trusted with anything.

> - Unions usually end up with rules regarding who gets promoted and who doesn't. Broke your back working OT to help out the company? Well tough luck Martha came in one month before you and has priority on promotions.

Did the union make those rules, or did management make those rules in an effort to control costs, and then blame it on the union?

Unions are democratic, by the way. If you don't like tenure-based promotion, vote to change it. You have no such recourse with a manager who arbitrarily promotes people they like.

Ahh yes the libertarian boogey man, unions. So you picked up a book or pamphlet about anti-union tropes and spewed them out here. Let's refute these statements 1 by 1:

- Voting on stuff monthly? Seems to be a really active union. Must be getting ready to strike and if that's the case why wouldn't they check to make sure they have broad support for one. Also, no one is literally holding a gun to your head. You can vote, vote no, or not vote.

- Don't know what union this is but dues I've seen are 1-2%. Whoever is getting paid $5000/week I'd like to join that union, too. Fine, maybe it's a really good union that charges 5%. I'd still want in because someone is taking home $2000/week.

- The word is seniority and this has nothing to do with unions. It's how factories from the very beginning have doled out promotions. Job for life and all that. Since most people don't want to be working the shit stirring tank how do you get promoted out the shit stirring tank? A simple metric the factories and offices came up and the union workers agreed to.

- Unions don't control this. But if someone gets fired for underperforming you know who's going to get a labor lawyer? The worker who's been paying dues to collectively have a lawyer on retainer. You see if I get fired, I get told I was a poor performer with no evidence. If the worker in the union gets fired there lawyer is going to want to see the evidence. And you'd be amazed at how poorly most companies document this. See the union doesn't keep someone from being fired. But it does make sure the firing is fair.

> Unions usually end up with rules regarding who gets promoted and who doesn't. Broke your back working OT to help out the company? Well tough luck Martha came in one month before you and has priority on promotions.

Good. I don't want promotion to be a race to the bottom for whoever works the longest hours. If you're gonna try to get ahead of me by doing OT, screw you.