So by giving them a $10k carrot they can basically lock them in to the company because it would be much more difficult to interview for competitors or even start startups. That's pretty genius.
I think there's a collective realization happening in the Bay Area that the landlords are the real winners and everyone else is just playing their game. Employees hate seeing 3k/month fly out the door in rent just as much as CEOs hate paying it, just as much as investors hate seeing their capital ultimately end up with landlords.
Big companies in general are conservative. They've made it and don't want to take unnecessary risks. Trying to introduce remote culture into a company that isn't used to it/tooled for it is a HUGE risk.
The innovation in hiring is going to come from small companies who need to hire but can't afford Bay Area salaries. Mid-career folks here, not even particularly good ones, are routinely looking at 200k or more out the door from their employers. 400k seed rounds, hell even 800k seed rounds, don't go very far on that kind of money. So what has to happen is that (a) founders have to get comfortable giving up a lot more equity for more capital, (b) investors have to be comfortable paying much higher valuations for early-stage companies, (c) employees have to be willing to take more stock in lieu of cash, or (d) companies have to do more remote hiring. I see a mix of all four happening depending on the particular circumstances of each company (e.g. famous founders will be able to raise more at higher valuation)
It's all pretty simple. The landlords win and everyone else loses. The situation will only get better once remote work is more widely accepted, but I'm starting to think it might come to that, with how expensive things are here. A nothing-special sandwich in Oakland, CA where I live is almost $15, at some point you say enough is enough and go somewhere where such an obscene price level is a joke, not day-to-day reality.
> The situation will only get better once remote work
No, that's not the only way. The real way for the situation to get better is for the local governments to adopt high-density zoning regulations, which would lead to the following:
-residential high-rises
-dense public transportation networks
-multi-use buildings (stores/services on ground floors, residential above)
-a real walking and cycling infrastructure that doesn't make you feel suicidal when you use it
-walkable neighborhoods
Whatever the price of the land is, the 20-story apartment high-rise will fetch more in rent than the two-story complex on the same land, even if the rent is 5x lower.
Simultaneously, you will be inclined far less to drive (or own) your vehicle if you commute by train and pick up your groceries on the 5-minute walk from the subway top to you home. This helps consolidate more people on a smaller expanse of land, reduce traffic, etc.
I'm not talking about having a Tokyo by the Bay. Such policies aren't unrealistic even by the US standards. What I wrote above can be found in Brooklyn.
I never realized it until you wrote it down explicitly, but you're right. Landlords laugh all the way to the bank, while the rest of the economy pays their tax. Amazing.
They aren't reducing people's salaries who "de-locate." So if they're clawing back any salary, it's long-term by giving them lower raises. It takes a while for that to kick in.
I think it is lock-in. Not just because it makes it somewhat harder to get in front of other companies, but because making a Bay Area kind of salary in a place with a non-Bay-Area cost of living sounds like the kind of thing that could make an employee very comfortable and very unwilling to go looking for another job. If you're getting like an equivalent of +$30k (or more), even if another company says, "Oh, sure, we'll hire you for $20k over your current salary... but you'll need to move back to the Bay Area," that's an offer you're much less likely to take than if you were already in the Bay Area. And local companies in your new place-of-work are unlikely to be able to match your existing salary.
High cost of living because competitive labor market. Competitive labor market because high cost of living.
You could break the vicious circle from either end. Build more houses, costs go down, more immigrants attracted, wages go down and costs go back up. Destroy local jobs, wages go down, fewer immigrants attracted, costs go down and wages go back up.
Every tech company that moves out eases the pressure, but that part about wages going down is tough for some people to swallow.
It is not just more housing, but also denser housing. And more distributed campuses.
Also the higher savings amount from bay area leaks into other regions. I hear texanians complain about swes from bay area inflating housing over there, for example.
