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Tech companies can reduce their labor costs by "spreading the wealth" a bit and hiring more people in larger satellite offices in cheaper cities like Buffalo, Pittsburgh, Cleveland, Columbus, Indianapolis, Cincinnati, Milwaukee, etc. Congregating so much tech talent in a few small clusters like the SF Bay Area/San Jose, Seattle, Boston, NYC, and NoVA/DC is why those areas in particular are stratospherically expensive to dwell within.
If I could be a software engineering project manager in Seattle making $200,000/year (and feeling middle-class) or the same title in Pittsburgh making $150,000/year (and feeling rich/living large) then where would I truly have the better quality-of-life?
I think we're finally seeing the "flattening" trend re: dispersal of jobs/talent take off, especially as remote work becomes more and more widespread and accepted.
The obscene rise in real estate costs, wherein most tech-heavy cities have reached a completely unsustainable level of COL for most middle-class earners, only serve to make this trend more pronounced.
The 2020s are going to be the decade for "the Rest of America."
You're going to see the rise of secondary cities perhaps, but it will likely still be a small few. As with most industries, they will follow the people. So Florida, Texas, Georgia, the Carolinas will be the biggest boon from leaving the Bay, Seattle, DC, Boston, etc.
Tech companies can reduce their labor costs by "spreading the wealth" a bit and hiring more people in larger satellite offices in cheaper cities like Buffalo, Pittsburgh, Cleveland, Columbus, Indianapolis, Cincinnati, Milwaukee, etc. Congregating so much tech talent in a few small clusters like the SF Bay Area/San Jose, Seattle, Boston, NYC, and NoVA/DC is why those areas in particular are stratospherically expensive to dwell within.
If I could be a software engineering project manager in Seattle making $200,000/year (and feeling middle-class) or the same title in Pittsburgh making $150,000/year (and feeling rich/living large) then where would I truly have the better quality-of-life?
I think we're finally seeing the "flattening" trend re: dispersal of jobs/talent take off, especially as remote work becomes more and more widespread and accepted.
The obscene rise in real estate costs, wherein most tech-heavy cities have reached a completely unsustainable level of COL for most middle-class earners, only serve to make this trend more pronounced.
The 2020s are going to be the decade for "the Rest of America."
Alternatively if working for Walmart, P&G, FedEx or Ford no longer requires living in Bentonville, Cincinnati, Memphis or Detroit maybe those people will want to live in New York, LA, Atlanta or Miami.
The fact Manhattan or Boston rents have soared massively beyond 2019 levels might show people who now can live anywhere actually will choose New York not Memphis. Only SF has not recovered.
Also I think a lot of the relocation will be from Boston to Nantucket or NYC to Cape May not like NYC to St Louis.
Agreed on both points: Only the SF area is really suffering from price/capacity pressures. And the remote thing goes both ways.
Regions like mine that keep building decent amounts of housing can keep growing. Though we (Seattle area) are mostly building multifamily, so we get a constant influx of 20-somethings who often leave when they want affordable houses.
The remote thing doesn’t really go both ways. Pay is higher in the big cities to offset the COL. Few are taking their Memphis paycheck and paying NYC prices. The math doesn’t work.
I think we're finally seeing the "flattening" trend re: dispersal of jobs/talent take off, especially as remote work becomes more and more widespread and accepted.
The obscene rise in real estate costs, wherein most tech-heavy cities have reached a completely unsustainable level of COL for most middle-class earners, only serve to make this trend more pronounced.
The 2020s are going to be the decade for "the Rest of America."
I just look forward to more American cities seeing a revival in the future. I mean the FBI dispersed itself a bit by building a state-of-the-art CJIS facility in Clarksburg, WV of all places about 30 years ago. As a result the Clarksburg area has not declined as rapidly as other similarly-sized parts of WV and even feels a bit prosperous. I believe another Federal agency (can't remember which one) built a large facility in Winchester, VA not that many years ago as well, which serves to reinforce the local economy there. If I remember correctly the DFAS (Defense Finance & Accounting Service) is in Indianapolis, IN, and the U.S. Census Bureau is in Jeffersonville, IN.
If the Feds can disperse some of their agencies away from being exclusively in/around the Beltway, then I would also love to see tech firms do the same.
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Originally Posted by Heel82
You're going to see the rise of secondary cities perhaps, but it will likely still be a small few. As with most industries, they will follow the people. So Florida, Texas, Georgia, the Carolinas will be the biggest boon from leaving the Bay, Seattle, DC, Boston, etc.
Agreed. With that being said if the tech presence grows more and more in Charlotte and the Raleigh/Durham areas, for example, and makes those areas more expensive, the opportunity arises for Greensboro and Winston-Salem to emerge as secondary tech cities to those emerging tech centers, and then those two cities can reap the benefits and revitalize themselves successfully. Someone living in Raleigh, NC by choice and getting laid-off from Meta, for example, probably wouldn't be too upset about moving to Greensboro, NC to work for Apple. That isn't a drastic relocation.
I also foresee San Antonio reaping spillover tech development as Austin becomes more expensive in the coming years, and I similarly see the potential for tech growth in Chattanooga to be proximate to Atlanta and Nashville.
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Originally Posted by masssachoicetts
I agree.
Thanks. I don't see that often to something I post.
Quote:
Originally Posted by btownboss4
Alternatively if working for Walmart, P&G, FedEx or Ford no longer requires living in Bentonville, Cincinnati, Memphis or Detroit maybe those people will want to live in New York, LA, Atlanta or Miami.
The fact Manhattan or Boston rents have soared massively beyond 2019 levels might show people who now can live anywhere actually will choose New York not Memphis. Only SF has not recovered.
Also I think a lot of the relocation will be from Boston to Nantucket or NYC to Cape May not like NYC to St Louis.
Maybe. Not everyone has the same priorities. Not everyone wants to live in a rat-race or keep up with the Jones's. Some people want enriching/rewarding work and to live somewhere that isn't stressful. I lived near DC. Hated it. Everyone seemed very Type-A, career-obsessed, materialistic, etc., and the cost-of-living was murder. I am much happier since I moved to a cheaper and more Type-B city where nobody gives a flying hoot about your credentials or what you do for a living. It's relaxing.
Quote:
Originally Posted by mhays25
Agreed on both points: Only the SF area is really suffering from price/capacity pressures. And the remote thing goes both ways.
Regions like mine that keep building decent amounts of housing can keep growing. Though we (Seattle area) are mostly building multifamily, so we get a constant influx of 20-somethings who often leave when they want affordable houses.
Unfortunately Greater Seattle is SO attractive to SO many people that your cost-of-living keeps increasing despite your truly impressive levels of residential developments.
Quote:
Originally Posted by Heel82
The remote thing doesn’t really go both ways. Pay is higher in the big cities to offset the COL. Few are taking their Memphis paycheck and paying NYC prices. The math doesn’t work.
Is it, though? If pay in big expensive cities was truly "high enough" to offset the COL, then why do so many in those same big expensive cities whine about being unable to afford their housing? Obviously if housing has become unaffordable to a significant enough percentage of the population there, then that city's salaries aren't high enough.
I'm sure more people flow to cheaper areas if all else is equal. But a good chunk of people want to live in their "dream city" for a while. I'm thinking particularly people in their 20s without a lot of commitments, and those who value urban districts or something else like surfing or mountain sports.
I haven't seen good stats about either (they're always generalized or tangential) but I bet the latter is significant too.
Those urban districts in expensive cities represent a tiny fraction of the country's population, particularly outside New York. A few percent maybe. So while any inbound numbers might be small on a national level they can be far more significant in these districts.
As for Seattle, condos, apartments, and houses have all slowed vs. peak increases due to the volume of inventory, as well as continued border controls (China especially).
Location: Miami (prev. NY, Atlanta, SF, OC and San Diego)
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At the bellwether tech company I worked at for 33 years, declining revenue for a given year was permissible within our division provided head count (code for reduction in force) was commensurate and in line.
Last edited by elchevere; 08-18-2022 at 11:32 AM..
,
Is it, though? If pay in big expensive cities was truly "high enough" to offset the COL, then why do so many in those same big expensive cities whine about being unable to afford their housing? Obviously if housing has become unaffordable to a significant enough percentage of the population there, then that city's salaries aren't high enough.
It doesn’t offset in total usually, it’s a trade off. But the idea people can or will take their Memphis paychecks and live with NYC rent seems wrong to me. At least in any meaningful way.
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