Why do Salaries in SV Suck So Much? (apartment, rent)

[abqcd]

I was offered a job in the SV for a base salary of about $120k and $165k in total comp. Right now, I'm making $115k in base salary living in an area with US average COL, which is about half the SV COL.

By my calculations, figuring a similar, modest house in the area, I would need to make $180k just to maintain my standard of living, figuring in housing costs and taxes alone. This is to say nothing of food, child care, etc.

This means, I would have to continually depend on my bonus and selling stock options just to pay my rent. Moreover, both of these could easily vanish if the company does poorly or a downturn hits. Plus, forget ever being able to save for the massive downpayment it would require to buy a house someday!

To add insult to injury, the company is extremely secretive, and won't even tell me what the job is, other than the general category. They won't allow me to publish at conferences, which seems like a real potential career killer in the long run, since I couldn't build a widespread reputation.

Question is: what gives? If these companies are swimming in billions in profits right now, why don't they at least pay enough to match the cost of living? And why don't they compensate you extra for not being able to build your professional reputation?

[mysticaltyger]

Originally Posted by abqcd

I was offered a job in the SV for a base salary of about $120k and $165k in total comp. Right now, I'm making $115k in base salary living in an area with US average COL, which is about half the SV COL.

By my calculations, figuring a similar, modest house in the area, I would need to make $180k just to maintain my standard of living, figuring in housing costs and taxes alone. This is to say nothing of food, child care, etc.

This means, I would have to continually depend on my bonus and selling stock options just to pay my rent. Moreover, both of these could easily vanish if the company does poorly or a downturn hits. Plus, forget ever being able to save for the massive downpayment it would require to buy a house someday!

To add insult to injury, the company is extremely secretive, and won't even tell me what the job is, other than the general category. They won't allow me to publish at conferences, which seems like a real potential career killer in the long run, since I couldn't build a widespread reputation.

Question is: what gives? If these companies are swimming in billions in profits right now, why don't they at least pay enough to match the cost of living? And why don't they compensate you extra for not being able to build your professional reputation?

Bottom line: People are willing to live here on salaries that don't make up for the higher cost of living. If people demand salaries that are deemed too high by these companies, they simply import HB-1 visa holders or move the jobs somewhere else.

[ccm123]

Most people in the US would love to have a job that pays $120K base with a 45K bonus.

[abqcd]

Originally Posted by ccm123

Most people in the US would love to have a job that pays $120K base with a 45K bonus.

Sure, in Texas. In SV, that doesn't even get you to the middle class now, which I define as the ability to buy a modest home and two reliable, safe cars plus two kids.

[sezzam]

A base salary of $120K in the bay area definitely meets the COL needs of any family (of four) and give you small savings. Any bonus you make will go towards additional savings. Of course, this depends on your standard of living.

If you are making $115K where COL is only about a half, you are either being paid very generously, and should keep that job; or your new job is not comparable to your current one; or your skills are unique where you are, but not all that unique in the Bay area. If your skills are unique even in the Bay area and you bring excellent value, you need to negotiate better terms.

This means, I would have to continually depend on my bonus and selling stock options just to pay my rent. Moreover, both of these could easily vanish if the company does poorly or a downturn hits. Plus, forget ever being able to save for the massive downpayment it would require to buy a house someday!

$3K-$3.5K rent should let you rent a very good apartment; which is well under the $45K bonus you expect to make each year. Now, what is this company that is swimming in billions in profits, but might not pay you a good portion of the anticipated bonus?

Question is: what gives? If these companies are swimming in billions in profits right now, why don't they at least pay enough to match the cost of living? And why don't they compensate you extra for not being able to build your professional reputation?

Have you asked the prospective employer these questions (in appropriate language, of course)? If you haven't, maybe you should, as part your negotiations.

[Tex?Il?]

Originally Posted by abqcd

Sure, in Texas. In SV, that doesn't even get you to the middle class now, which I define as the ability to buy a modest home and two reliable, safe cars plus two kids.

Something doesn't look right here. What do you need two cars for?? Are you married? In that case does your wife have a job? Then your combined income should be a lot more. In many households these days the wife may actually earn more. Or is she going to be a stay at home mom.

Whats a decent house? I bet what you would consider a decent house is a mansion compared to what most people would define as a decent house in the 1950s. Oh, and back then, middle class was considered only having one car for the family. It was still considered to be well off for a family to have two cars back then.

Many, many, many people are very, very happy with that kind of income in coastal California. The weather believe it or not, really can save you a lot more money than one might think.

I'm sorry, but I think your definition of middle class, is really more upper, upper middle class.

[sezzam]

Originally Posted by abqcd

Sure, in Texas. In SV, that doesn't even get you to the middle class now, which I define as the ability to buy a modest home and two reliable, safe cars plus two kids.

If two reliable and safe cars (thinking Volvo?) is middle class, I like to understand your idea of a modest house for that middle class family.

[silverkris]

Originally Posted by mysticaltyger

Bottom line: People are willing to live here on salaries that don't make up for the higher cost of living. If people demand salaries that are deemed too high by these companies, they simply import HB-1 visa holders or move the jobs somewhere else.

I don't know how significant this is, but there are "halo" companies here that are attractive by their reputation and consequently, don't offer top salaries in their segment to their people, at least for more junior hires. Google and Apple supposedly practice that. Microsoft about 20 years ago was known to do this, too. It might be a bit different for really more experienced/outstanding star hires.

[ggcd951]

i get paid 108k + 10k bonus and pays 1700 in decent apartment. I am happy with what i have does not want anything for more. I try not get into rat race with others. My definition of middle and upper class is not measured by 2-3 cars, price of housing it is really how you satisfied with your current satisfaction.

[mysticaltyger]

Originally Posted by ccm123

Most people in the US would love to have a job that pays $120K base with a 45K bonus.

This too. I live here in SV and I make less than half that.