Comment by bane | Hacker News Reader

Comment by bane | Hacker News Reader

This is potentially a great way to go and solve the "engineering shortage" in the U.S. There are tons of qualified engineers in places all over the U.S., but S.V. never bothers to look for them. The great side benefit is that the cost of living in most of the U.S. is much lower than on the coasts meaning you can almost get 2 people in nowhere Alabama or Nashville, Someplace for the price of 1 San Franciscan or 1 New Yorker.

They'll speak English, share a common-ish culture, and have gone through the American educational system so interfacing with them isn't nearly as hard as real offshored employees or contracted firms. They'll also be within continental U.S. time-zones. You want to solve work visa problems? This is how you do it.

I've met a few entrepreneurs who were self-funding and thus really cared about their burn rate while building their product who opted for teams of devs in overlooked places in the U.S.

If you want a starting point, checkout towns near DOE National Labs. They're usually out in the middle of nowheresville (because of nukes) and are full of incredibly educated, qualified people, who may have moved there for lab work and ended up not like the stifling academic environment of National Labs. There resumes may not be a string of startups, but they're used to working on bleeding edge stuff and the cost of living in these areas is generally pretty low.

https://en.wikipedia.org/wiki/National_laboratory

Judging by the recruiter spam I get, it's not entirely true that SV companies are not looking outside SV for employees -- it's just that they expect them to move to SF to work for their company. About 90% of the recruiter spam I get is from companies based in SF, but most of them are not open to remote workers.

Ya. And at least the ones I get expect me to want to jump ship for the same salary I'm paid now...

I don't think they think things through very well when it comes to labor relations in general.

Our company (Ambition, YC'w14) has thrived with this logic. Its really part of our culture & our philosophy for being a "cockroach" startup (aka stay alive long enough to build a great business).

Our HQ is in Chattanooga, TN. Many of our engineers interned or worked with Oak Ridge Nat'l lab while at university.

The majority of our employees are not from Chattanooga, but ended up choosing the southeast or midwest over SV - we constantly hear from amazing engineers/ designers/ sales people in Nashville or Atlanta (both ~ 90 miles away), as well as Memphis, Knoxville, Birmingham, research triangle (NC), and of course SV, NYC, Chicago, etc.

In our opinion, great people live all over the place for a multitude of great reasons. In our case, Chattanooga had A. excellent quality of life & B. reasonable cost of living. We still spend a lot of time in the Bay Area and have built an incredible network, but not every 10x engineer wants to live in SoMa.

I agree with your overall point of looking in the areas around DOE labs (disclaimer: I'm at one now and worked at a different one in the past), but maybe only half-ish of them are truly in nowheresville. I would say Idaho, Los Alamos, NETL, Pacific, and probably Ames definitely are; while Oak Ridge is kind of on the bubble. This might just be my bias having grown up in the Midwest.

The rest are in major metropolitan areas, or very close by, such as: Livermore, Brookhaven, Argonne, and NREL (among others).

One thing you might notice is that many of the more out-of-the-way labs are on or next to the campuses of large universities with strong technical bases that maybe you didn't know about, like Iowa State for Ames and West Virginia University for NETL.

Don't forget Fermi National Accelerator Lab (Batavia, IL). I worked there a year (LHC CMS detector), and it was so terrible I jumped right back to the private sector with ~5 other co-workers.

Oh I know Fermi hahaha, my hometown is literally next to Batavia (Geneva). I just wasn't listing all of the labs.

It was a bit surprising to me, but each lab really seems to have a completely different overall culture set, and then it splinters even further within each group. I worked at Livermore one summer, and the differences between them and Oak Ridge (my current employer) are stark. Part of it is that these labs do a lot of local hiring, so they get shaped by regional values.

Conversely, my significant other is an experimental nuclear physics PhD candidate who works at Brookhaven. Their stuff is open and international, while the labs I've worked at have very strict guards on information sharing and international collaboration.

What drives so much variation in the cultures do you recon/? More isolation type (galapagos syndrome) or is it the parent/funding culture (beauracracy etc)?

It's a combination of disparate factors. Most labs were set up under different initial conditions, and their future contracts and direction spun out of their initial intention. There are specific nuclear security/safety labs (Livermore/Sandia/Los Alamos), specific fundamental research labs (Fermi/Brookhaven), and more generalist labs (Oak Ridge/Argonne). This is not to say that each lab doesn't have significant overlap.

Livermore may be fundamentally a nuclear security/weapons lab, but they also morphed into a HPC and biotechnology lab, while I worked in more of their general energy research directorate, which covers everything from hydraulic fracturing and carbon sequestration, to novel enzymes for breaking down free methane. To give an exmaple, I never interacted with the people working at the National Ignition Facility, nor was I allowed in their building except on a tour (it was an awesome tour).

Oak Ridge has a general Environmental Sciences Division, which ranges from genetic engineering, to ecology, to soil sampling, to water power technologies research. That's just in the single building where I work, and these are just small subsets of current missions, while labs have specialties in certain areas, such as Livermore being great for lasers, or Argonne being known for transportation research. Oak Ridge has a big campus, and it's easy to never interact with other buildings. I believe both Oak Ridge and Livermore have 7k+ employees.

The labs are also managed completely differently. Livermore is technically run by a corporate board after it was restructured away from the University of California system, maybe 10 or so years ago. Lawrence Berkeley Lab I believe is still in the UC system. Oak Ridge is managed by a combination of Batelle and the University of Tennessee. I want to say Fermi and Brookhaven are managed by national physicist groups or something, although I'm not certain.

And finally, of course, the overall lab culture is influenced by their hiring practices and regionality. Before I became involved in this system I had no idea they were all so different, and the really amazing breadth of projects across all the labs. Hope this helped elucidate it a bit.

Thanks, this is really interesting.

Los Alamos is in the middle of nowhere, but Sandia is smack in the middle of a metro area of ~1M people (Albuquerque).

Right, sorry! I tend to forget they're not literally next to each other since they're both nuclear security labs and in the same-ish area.

I believe outsourcing to the midwest would fix the housing shortage here in the valley as well. Less people would need to move here and thus, hopefully, help rebalance the housing supply.

I don't see how two people producing the same output deserve different salaries based on where they live - why should geographic location dictate my salary relative to my peers?

Because demand is less. The wage is still dictated by supply and demand. The supply is probably less, but the demand for that labor is far less. The demand for an engineer in the midwest is higher than the demand for an engineer in Thailand because there are less time barriers, language barriers, etc.

A house in Palo Alto, CA costs more than the exact same house in Dexter, Michigan. If they were made of the exact same materials on the exact same size of land, you wouldn't expect them to cost the same either.

I don't think the house comparison is a good example - a house in Palo Alto can only be utilised in Palo Alto. A remote worker could work from anywhere and produce the same output, regardless of location.

Pay levels based on location seem like a good way for companies to "save" money by providing a convenient excuse to pay someone less for the same work.

I meant it in this sort of comparison: if you uproot the house, and drop it in Palo Alto on the same size plot of land it's worth more. If the programer gets up, and moves to San Francisco, his labor is also worth more. Same person, same house, different demand (and supply).

That is correct. I, living in Dallas, am willing to sell my labor in Dallas for a lower price than I am willing to sell my labor in Palo Alto. Thus, a company in Palo Alto can save money by hiring me in Dallas to do the job. There is nothing inconsistent about this.

Price should be based on the value you are providing to your clients/employer. Not your expenses.

If only the price of my house was based on the value I provide my employer.

What does this have to do with anything? The amount you paid for a house is based on it's value to you. Same as your employer and it's employees. I live in the midwest - a cheap place to live. But I charge SV rates because of the value I provide my clients. I don't have to charge "less" because I live in a cheap area. It is irrelevant.

When you factor in the cost of living it's not an "excuse".

If, after the obligatory expenses like housing and food, the employee has more after tax dollars to spend on whatever he wants and in many ways a higher quality of living (better housing, better control over crime although that's looking to change WRT California, etc.), is he getting cheated as you imply?

I've lived in the Boston area and the D.C. area for a dozen years each, and have now moved back to my smallish home town in SW Missouri ... the differences are staggering.

Look at imroot's policies: https://news.ycombinator.com/item?id=7568217

Officially the same pay, but the people in California get an extra 1K/month for their higher living expenses. Heck, the Federal government does this for civil servant compensation.

Flip side: if the company is nasty, it'll tie up it's outside of California employees with non-competes---although that could be a bit tricky, given that it would get no support in the California state courts. How would you establish jurisdiction in the employee's home state?

Market forces. Just like anything else - supply and demand.

Don't think of it in terms of gross dollars. Think of it in terms of standard of living. A skilled engineer is going to have an upper-middle-class standard of living, regardless of location.

> "why should geographic location dictate my salary relative to my peers?"

It doesn't. Your unwillingness to relocate does.

Everyone has their own reasons for where they're willing to look for work and why. But those reasons, your reasons, have a price tag attached. To you, your reasons + your salary is equivalent to a SV salary. (Else you'd relocate.)

Similarly, companies who are unwilling to allow remote workers and/or choose not to build remote teams aren't paying more because of their location. They're paying more because they value having their employees at their location and that value is greater (to them) than the difference in SV salaries vs the midwest.

Because "you" (the generic you--not necessarily you specifically) are usually willing to accept a different salary for a given job description based on where you lived based on a variety of factors: alternative opportunities, attractiveness of the area, cost of living (primarily housing), etc. And, in fact, jobs in higher cost of living areas (assuming equivalent jobs are actually available elsewhere) tend to not fully factor in the difference in housing prices.

> Because "you" (the generic you--not necessarily you specifically)

"One". Wish this was in more standard use.

Cost of living is wildly different in different areas. People in NYC need to earn more money than somebody in Idaho Falls to live even close to a comparable lifestyle. A million dollars will buy you an "ok" 2 bed room apartment in Manhattan in an "ok" neighborhood, while a million dollars near Houston will buy you multiple acres with a brand new 7 thousand sq foot 6 bedroom 9 bath home on the waterfront with a guest house and a swimming pool next to a pro-level 18 hole golf course.

If you don't understand it further, feel free to take the midwest salary and try and live in San Francisco or NYC.

OK, but imagine this situation: I have affixed a monitor with a webcam to a robot that represents "me" in an office. It is able to sit at a desk, attend meetings, etc. I work from home in some place with a lower cost of living and use the robot proxy for interaction with my peers. Should I be paid more or less than other people working in that same office, producing the same output?

Less, because those people have to live there where it's more expensive. While you live where you live where it is less expensive.

You're thinking of this as advantaging you, getting SF pay for working in Idaho Falls, but you need to think of is that salary in Idaho Falls is the "normal" base salary, everybody earns at that rate, and cost of living adjustments are paid on top of that base salary for people in expensive areas to create as equal of living conditions as possible in more expensive areas.

This is so commonly understood that nobody bothers to break it out that way except for the Federal Government pay scale. Everybody from Podunk, Nowhere gets excited when they get a job in the big city because of this pay differential on what they'd make where they live. Except the cost differential is similar and when they arrive they suddenly realize it doesn't buy them anything more.

By paying people "the same" at the base salary, your salary model would disadvantage people working and living in cities such that they could not do it and companies that need to be in cities would be unable to function.

Companies with large workforces in cheaper areas could also not pay their workers SF/NYC salaries or their costs would simply overcome their revenue or if they can manage it, they may as well have just hired in SF/NYC in the first place and realized better efficiencies of physically working together. Your robot is a poor substitute for actual face-to-face interaction and introduces lots of inefficiencies into communication.

Not all jobs for a company need to be in the expensive areas, so it would make more sense for companies to push those jobs to cheaper areas. But some jobs do need to be in expensive areas for efficiency. Cities exist because of those efficiencies. However, being a city with 5x population of Idaho Falls doesn't mean you have 5x the resources, so demand drives up the cost of goods and thus the cost of services rise and thus it simply costs more to live there.

Companies wish to continue operating, so they need people to be able to afford to live near where the company needs to be (which is dictated by the efficiencies of the city). This is reflected by pay differentials for people that need to live and work in these cities. Nobody can live in SF or NYC on Idaho Falls pay.

For a variety of reasons, your personal, physical presence in an industry cluster[0] is valuable. Managing a business is a coordination problem, and it's generally the case that said coordination problem is best solved by having everyone in the same office. So an employee in Silicon Valley or NYC is, on aggregate, significantly more productive than the same worker in most of the Midwest, even if their individual effort is no different.

Unfortunately, the dominant housing policy regime of restrictive single-family zoning and auto-oriented transportation, which significantly limits new housing production in the most productive areas of the US, causes high wages and growing populations to lead to lead to extraordinarily expensive, overcrowded housing.

[0] http://en.wikipedia.org/wiki/Business_cluster

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