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Comment by JumpCrisscross | Hacker News Reader

> it basically says "anyone who works for a W2 will cause inflation if they are successful"

Then take comfort in that armchair analysis being wrong. If it were true, if FAANG employees’ pay were driving inflation, we’d expect to see local inflation correlate with FAANG employment.

It does not. In fact, almost the opposite is true, with inflation in the interior outpacing that on the coasts [1][2]. (Shipping.)

[1] https://www.bloomberg.com/news/articles/2021-11-11/inflation...

[2] https://www.jec.senate.gov/public/index.cfm/republicans/anal...

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My armchair analysis is that we have heavy inflation in what were low-mid CoL cities as the big money remote workers cash out of the coasts for cheaper locales

Or in other words, the rest of the country catching up to the big cities

No idea if this is the truth of course

> we have heavy inflation in what were low-mid CoL cities as the big money remote workers cash out of the coasts for cheaper locales

Internal migration is too slow and too small to explain the interior’s price shocks. Also, it’s not like the coasts are withering away. Real GDP growth in California and New York was better than the national trend in Q1 2022; the interior saw the worst of the real economic shock [1].

[1] https://www.bea.gov/news/2022/gross-domestic-product-state-1...

>Internal migration is too slow and too small to explain the interior’s price shocks.

As anyone who paid any attention to the housing market in the past 2yr knows, if you have 10 houses and 11 buyers...

>the interior saw the worst of the real economic shock

That places that have economies that are more dependent on physical goods, services that cannot be performed remotely and high volume low margin types of business (which are heavily affected by supply chain stuff and commodity prices) should not surprise anyone.

How does any of this relate to testing the hypothesis of FAANG employees driving inflation?

My primary point was that the extra demand caused by FAANG driven monopoly money suddenly sloshing into these other markets could easily cause prices to increase far beyond what the dollar values and number of people would make you think because supply for all sorts of things is not elastic enough over a short enough time period.

At least in housing, this seems to be the case... In cities like Seattle, the DMV area, etc., I hear about price decreases and homes sitting on the market for weeks.

Where I'm located(east coast LCOL area), we still compete with ~15 bidders for every house, and they're still reliably selling within 2-3 days for 10% over asking, all cash, with inspections waived.

Obviously part of this is a supply issue, but, I have a strong suspicion the rise of remote work is a contributor to price increases near us. We live a short distance(~1-2 hrs) from several major metros, and with the flexibility to go into the office only a few days a month, It's feasible to take a much higher paying job in somewhere like NYC and commute. Local wages for engineers here are/were also much lower than what was offered for typical remote roles, so I'm sure that's causing an additional upward pressure

Isn’t this a result of inflation in the interior finally catching up to the ridiculous pace that the coasts have had as coastal money flees inward due to WFH and unaffordable housing prices?

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