Treating the Bay Area as like working in the mines

https://pedestrianobservations.com/2018/09/24/the-mines/

by imartin2k • 8 years ago

90 75 8 years ago

angarg12• 8 years ago

I'm looking to relocate to the Bay next year, and I'm exploring renting a one bedroom with my partner. Our plan is to rent as cheaply as we reasonable can, even if we can afford more (that is what we are doing right now).

I think the analogy to the mines is spot on. At the same time it seems like the most rational approach for most tech workers. Even if I wanted to stay in California, as a foreigner in a L1 visa, my future will be too unpredictable to commit myself. Even after getting a green card, another recession would most likely force me to leave the area, if not the country altogether.

Having worked through 2008 I know the current situation won't last forever. In the meanwhile, I rather work in the mines and extract as many resources as I can from the ground. Once the mine dries up and we are forced to move I'll have time to reevaluate my position in life and priorities.

cylinder• 8 years ago

Are you Indian born? What category would you be in for an employment based green card?

megablast• 8 years ago

Our plan is to rent as cheaply as we reasonable can, even if we can afford more (that is what we are doing right now).

Everybodies plan is to do that.

pm903• 8 years ago

Mine are similar and I just moved. Its as demanding as I was warned it would be but oddly I feel great. I've never had as much responsibility and yet have to work on tough engineering problems at the same time before. Maybe this is the best way to learn for me; I feel like I've learned a lot from being around very very effective and driven engineers. Its increased my confidence in my craft. And I think those intangibles are worth a lot more down the line.

Of course, I'm able to work as hard because I kinda really like programming and learning about how Computers/Algorithms work. If I didn't have that inclination, then this would be hell.

nostrademons7• 8 years ago

I'd say it's more like conventional factory towns from a couple centuries ago.

I grew up in the Boston area, and on a recent trip back home, took my wife to see Lowell National Historic Park, birthplace of the industrial revolution in America. It struck me how similar the stories of the young women who went to work in the mills were to the young people who now flock to the Bay Area. Like today's workers, they were fleeing political instability & violence (for immigrants) or economic stagnation and lack of opportunity (for domestic migrants). Like in the Bay, they were thrust into a melting pot of cultures that sometimes stirred conflict but usually ended up broadening their horizons. Like in SF, they lived in small tenements or boardinghouses, often 2/room. Like at tech startups, they worked long hours in often alienating conditions to make capital owners rich.

The interesting thing about it was that despite all the hardship, it was very often the right choice financially for them. Many of the women who worked in the mills would "retire" in their mid-late 20s or early 30s, having saved up the majority of their wages. They were then free to do things like become a pastor (the 1840s equivalent of living a life of spiritual enlightenment), or get an education (nearly unheard of for women in those days), or marry above their previous station and have a family, or return to their hometowns and buy up large swaths of farmland that would've been out of their reach had they stayed on the farm they grew up on.

The people who really got screwed by the industrial revolution were those who didn't take the factory jobs in poor conditions - the small homesteading farmers, the artisans and craftspeople, the local merchants. They were largely wiped out as the new means of production spread throughout the world, bankrupt dinosaurs who eventually had to sell what was left of their homesteads when the dust bowl hit almost a century later. Most of them ended up catching the next wave, though, migrating to California or the Great Lakes and getting jobs in the new aerospace, defense, and automotive industries.

vostok4• 8 years ago

Many of the women who worked in the mills would "retire" in their mid-late 20s or early 30s, having saved up the majority of their wages.

Thanks for sharing. I was under the impression that this was a relatively new phenomenon with the advent of sky high compensation in tech roles.

Do you happen to know how common it was for them to be making, say, $300k in inflation adjusted terms by, say, age 26?

I'd love to read more about this if you have any links. All the stuff I remember reading in school was about how horrible it was.

badpun• 8 years ago

My guess was that standards of living were drastically lower back then, so the accumulated factory wages could make a difference. Back then, people lived in crappy little houses with no electricity, no water/sewage, obviously had no cars etc. There was relatively little stuff in their lives, so, as long as the land provided you with food, you didn't need much money. My grandma used to live like this in rural Poland - they occasionally bought something with money, like salt or matches, both mostly were self-sufficient.

nostrademons7• 8 years ago

It was exhibit panels at a museum, so there's no online link, but looking up some historical prices:

Wages in the Lowell Mills in 1845 were about $25/month. [1] As of 1825 farmland went for roughly $5/acre. [2] So for every month you worked in the mills, you could buy a 5 acre farm. Save up for 10 years and you could get a roughly 600 acre farm, which is pretty substantial. Mill girls had very low expenses because their room & board was often paid for by the company and they didn't have time to go out and have fun, so they banked a lot of their earnings.

A house in Brooklyn went for $2500 [3], so if you wanted to be a city girl, save up for 8 years and you could own it free and clear.

It's hard to talk about "$300K in inflation-adjusted terms" because life was qualitatively so different back then. You couldn't buy an iPhone at any price, nor electricity, nor running water, nor basic sanitation and medical care. The poorest American today lives a much better life than the richest industrialist back then, except for having to look around him and see how everyone else is living even better ones. But by the standards of the day, someone who saved for 10 years in the mills could become quite wealthy, at least relative to the peers they left behind.

Conditions were horrible - quality of life for mill girls was usually a lot worse than the farms they left behind. That goes for middle-class kids who become programmers in Silicon Valley as well. ;-) But economic gain is different from quality of life: part of the reason wages were high was because they needed to be to attract people from their old lives and put up with the new one, and one way to do that is to say "Well, when you're done here, you're gonna be the big man/woman in your old village."

Also, we tend to judge the past by the standards of today, which isn't really fair. The choice these workers had wasn't "Work in the mills or live in the post-WW2 era of 40 hour work weeks", it was "Work in the mills or work on the farm."

[1] http://courses.wcupa.edu/johnson/lowell1845.html

[2] http://www.afrigeneas.com/forumdarchive/index.cgi/md/read/id...

[3] https://247wallst.com/investing/2010/09/16/the-history-of-wh...

NeedMoreTea2• 8 years ago

I would hope it's not like that. Not after reading a quote someone posted about Lowell just yesterday: https://news.ycombinator.com/item?id=18060336

nostrademons7• 8 years ago

The interesting thing about that quote is that her family would've been fucked - even more fucked - had the Lowell factories not existed. The source of her family's misery was "a father’s debts are to be paid, an aged mother to be sup- ported, a brother’s ambition to be aided", all of which are pre-existing conditions that ultimately result from life (and perhaps some poor financial management).

Similarly, I think we're fucked today, and the source of our fuckedness has nothing to do with technology. It comes from overpopulation (there are now 7.4B people on this earth, compared to 4.5B when I was a kid and 1B when my parents were kids), and climate change, and resource depletion, and living like the good times will always go on rather than investing in the future. Life requires resources - when the planet has more lives to support and fewer resources to support them, the standard of living will necessarily go down.

vtange• 8 years ago

But how does the scale compare between the two? It would seem like tech work lifts much less people up the chain as factory work did. And in less proportion too: A factory in the industrial era could employ thousands at a time from a population of hundreds of thousands whereas now we live in a world of millions and tech comparatively employs a couple hundred.

nostrademons7• 8 years ago

It's similar in percentage terms, perhaps even a bit more concentrated. Lowell, Massachusetts had a population of 20K in 1840, with maybe 6000 working in the factories. Total U.S. population was 17M at the time. Compare with Google alone having 60K employees spread out across dozens of offices.

Lowell was the only such center of manufacturing in the country at the time, much like how Silicon Valley is considered synonymous with the tech industry. There are other tech hubs, though, and other companies, and tech is already starting to bifurcate into sub-industries. I'd actually equivalent 1840s Lowell to the Massachusetts Miracle of the 1970s, when the MA economy was rescued by the arrival of info-tech firms like DEC, Stratus, Wang, etc. (ironically, DEC was started in a former textile mill, and Wang Labs had its headquarters in Lowell). The current point in history seems more like the 1880s or 1890s, when the center of industry had moved to the Great Lakes region and the basic technologies had bifurcated into the steel/oil/shipbuilding/railroad industries.

We think of factory work as employing the whole population because the oldest folks alive today only have memories of the 1920s and onwards. What are these big industries that lifted people up the chain? Automotive, aerospace, airlines, oil, manufacturing, plastics, chemicals, retail, consumer goods, media. In 1880 the car hadn't been invented. The plane hadn't been invented. Plastic hadn't been invented. Radio hadn't been invented. TV hadn't been invented. The department store hadn't been invented. Consumer goods required all of these.

Similarly, I suspect that the great industries of the information age have yet to be invented. Or they're in vary nascent, experimental forms today, like drones and cryptocurrencies and hyperloops and robots and self-driving cars (which'll probably end up being pods, eventually).

null0pointer4• 8 years ago

At $5,500 per month is that to rent or buy?

I currently spend about 25% of my after-tax salary on rent and I consider it too much for me.

$66,000 => $264,000 after-tax. Californian marginal income tax bracket for $52k - $268k is 9.3% So $264,000 after-tax => $291,000 pre-tax (I know that's not how tax brackets work but I'm just estimating)

And that must be base salary since you can't pay rent or buy food with stock options.

On Glassdoor a SENIOR developer at Google in SF shows as only $170,000.

So can someone either tell me where can I get a $300k job as a MID LEVEL developer or tell me how on earth the author considers $5,500 per month an affordable housing cost?

Side note: My marginal income tax rate in Australia is 37%... I feel absolutely robbed looking at these California tax rates

tehlike• 8 years ago

Rsus do stack up with refreshers.

dgoldstein0• 8 years ago

Yeah that 170k probably doesn't include stock based incentives. With those, >300k sounds plausible.

null0pointer4• 8 years ago

But you can't use your options until they vest right? Maybe I don't understand exactly what you mean

nostrademons7• 8 years ago

Hence roommates. $5500/month split 2 ways is $2250/month, which would still be ridiculous in any other city but is doable on a $130-140K base. Split 4 ways (that's doubling up in a bedroom) it's $1125/month, which is basically how non-tech-workers do it.

null0pointer4• 8 years ago

The author specifies living alone

$5,500 a month at market rate, which is affordable to a mid-level programmer at a large tech firm living alone

I understand what you mean that roommates are the only way it could make any sense. But I'm trying to understand where the author is coming from.

busterarm• 8 years ago

5500 split two ways is not 2250.

topmonk• 8 years ago

Side note: My marginal income tax rate in Australia is 37%... I feel absolutely robbed looking at these California tax rates

You're missing federal. You have to add both together to get a final tax. At that income federal would be about 30% after deductions. So totally it's around 37% - 39%, depending on your deduction.

glangdale• 8 years ago

Correct. I had to laugh at the idea of someone at that income level paying 9% marginal.

US taxes work out a good deal less than Australian if you are paying Australia federal income tax but filing in the USA at a federal level (joys of dual citizenship!), but Australians often don't add up fed+state+local. So there's a lot of mythology in Australia about the low-tax USA as we don't pay state income tax here.

smivan2• 8 years ago

Here are real numbers.

Background: Average of 10 programmers who range ages 22-25 and are 2-3 years out of college.

Base: 140k Bonus: 30k Equity: ~60k Total: $230k year pretax.

Taxes: - 33% federal bracket - 10% state bracket - 7% FICA+Medicaid. (50% total)

Brackets listed are marginal rates, actual rates are noted here: https://smartasset.com/taxes/california-tax-calculator#p9c7Y...

Let's run the math - $230k comp - $83k taxes = $147k/year - assuming no other expenses, no retirement savings and no other income, that's 147/12 = $12.2k/mo, post tax. At this point $5,500/rent is easy.

Realistically, the breakdown is more like this: $147k post tax income - $20k retirement - $18k food/drinks ($1500/mo in SF is reasonable) - $10k car payments - $10k insurance/misc = $89k/year

$89k / 12 = $7,400/mo post tax and expenses. A $5,500 rent is still doable, but again extremely stupid because you aren't saving.

ovi256• 8 years ago

Taxes: ... (50% total)
run the math - $230k comp - $83k taxes

Please fix this inconsistency.

gbustomtv5• 8 years ago

20% bonus is not what mid engineers get.

60k equity is probaly over 4 years not 1. 60k over 4 years is actually close to average equity comp for 140k comp bracket.

You are off by 50k.

Signon bonuses can bring total comp to 200-210k.

Background: I write eng offers and know comp brackets.

woolvalley2• 8 years ago

$5500 is not a realistic rent option for someone living alone. You can get one bedrooms or studios in nice neighborhoods for under $3000-$2500. You can also live 45 minutes away from employment centers and pay less. So the math is significantly different from that inflated price he is talking about.

Also by commuting you can use company busses if you work at bigco, subsudizing living far away.

humanrebar• 8 years ago

Single parents generally don't have roommates.

claydavisss2• 8 years ago

When Gavin Newsom is elected Governor there will absolutely be a rise in the State rates for the top brackets. Jerry Brown pushed back and vetoed much of this stuff but he could only get away with that because he has no desire for another elected office. Newsom wants to be President and he knows that to get there he will need the help of the incoming left-wave in Sacramento...and the left-wave is completely focused on building their agenda on a tax-the-rich strategy that has been broadly supported in Propositions over the last few years.

tl;dr: Californians should get ready for more State taxes. A lot more.

jiveturkey6• 8 years ago

On Glassdoor a SENIOR developer at Google in SF shows as only $170,000.

That would be the base, not total comp. Sr dev at Google is easily $250k.

titzer2• 8 years ago

After 5 years there, my conclusion was that the Bay Area runs on human souls. It might not be like the black lung, dirt-faced dangerous mines of old, but if you end up working 10 or 12 hours a day, are caged, distracted, annoyed (but fed!) at work, go home to a meager existence, have zero friends, zero romance, and your mind is hijacked to the point where you literally cannot think about anything else and relax, then your soul is being pretty much sucked dry.

Get out if you can.

EZ-E• 8 years ago

It might not be like the black lung, dirt-faced dangerous mines of old, but if you end up working 10 or 12 hours a day, are caged, distracted, annoyed (but fed!) at work, go home to a meager existence, have zero friends, zero romance, and your mind is hijacked to the point where you literally cannot think about anything else and relax, then your soul is being pretty much sucked dry.

I would get my soul sucked dry for a few years for 100k$+ a year - for few years

carlmr2• 8 years ago

100k$ won't create much savings in the Bay Area. At least aim for 200k$ there if you want to sell your life for years.

watwut2• 8 years ago

One thing to consider is that if you spend several years with zero friends, zero romance and doing only single thing, then it is hard to start socializing again (assuming work is work and not socializing moved to workplace). You forget what it is like, how to do it, how to choose people to be with. You wont know what to do with time.

jiveturkey6• 8 years ago

Where, in the entire US, does tech not pay $100k? startups pay more than that here. You don’t need to come to SV to make $100k. Any city will do.

ryandrake3• 8 years ago

I’ve been here only 8 years at this point but I find the Bay Area is what you make of it. If you want to work 12 hour days, go ahead and do that. If you want no friends or hobbies, that can be accommodated. If you want to spend $5k/mo in rent so you can live in the city, knock yourself out and do it, nobody is stopping you. But these are all optional, and avoidable.

jiveturkey6• 8 years ago

not my experience. yup worked super hard but also partied pretty hard and made lots of lifelong friends. you do that when you have a shared experience.

anyway just saying, i found my first five years to be collegial. i would never ever do it again but i look back with fondness.

of course it only works if you are in an exciting startup or small company. i very very much doubt you are going to forge bonds if your first job is at FAANG and you did not attend shool here.

i cannot believe new grads would come here for the FAANG experience. that does indeed seem awful to me.

pm903• 8 years ago

This comment kinda reveals just how little you know of how the rest of the country and the world looks at Silicon Valley. Google, MS etc. are seen as great jobs for many immigrants and (as I found in grad school in a rural area) small town kids. They compensate extremely well, which is enough of a carrot for many, many people, especially those from less economically privileged backgrounds.

rconti• 8 years ago

Protip: Don't do that.

Don't work for a soul sucking company. Don't have a crappy boss. Don't refuse to have hobbies, don't refuse to have friends.

Moved to the bay area 16 years ago. Love it. Can't imagine going back to the northwest.

I've worked at a handful of tech companies and NEVER felt pressured to burn myself out.

Life is what you make of it. That's not to say there aren't crappy employers out there, and it's not so crap on the plight of those who feel stuck. Those employer should be held to account, I don't want to blame the victim.

But I've seen nothing about this area that makes it more likely to happen here than anywhere else.

titzer2• 8 years ago

But I've seen nothing about this area that makes it more likely to happen here than anywhere else.

Everyone has different experiences, but this does not really jibe with the incentive structures of Tech companies. Heroic hackers with legendary exploits are not only lionized, but everyone is rewarded with "pay for performance" incentive structures, and of course, the elusive jackpot of startup glory.

In my experience it's absolutely part of the culture in Silicon Valley that top hackers burn themselves out like this.

Having a normal life seems to be counter to the prevailing mindset and the very real, very palpable monetary incentives.

pcwalton• 8 years ago

I'm sorry you had a bad experience. But it's not bad for everyone: I really enjoy it here and, honestly, my biggest fear is having to leave someday due to costs, because my quality of life is so high and because I have a lot of friends here.

trhway• 8 years ago

if you end up working 10 or 12 hours a day,

when i walk the dog past the cool&hip startups in the downtown Palo Alto, i always wonder what happened - nobody is working in the evening in these nicely appointed open floor offices designed to foster creativity, collaboration and communication. Those 10-12 hours a day seems to be a myth these days.

caged, distracted, annoyed (but fed!) at work, go home to a meager existence, have zero friends, zero romance

the Palo Alto, Mountain View, etc. downtowns (and what i gather the Mission and other cool places in SF) are bustling in the evening with young techies socializing and romancing when they are supposed to be crushing their soul in a soul crushing startup. One more SV myth ...

megaman82• 8 years ago

You can avoid many of these places if you let the recruiters, HR and interviewers know that your looking for a place with good work life balance. It is hard to find good companies to work for in the bay area, but there are a few that exist. Make sure you read the glassdoor reviews: don't pay attention to the star rating (those are completely messed up), but the truth tends to come out in the writings, especially the longer reviews. Read those very carefully. If the place is toxic, it often comes out.

code4tee• 8 years ago

Its a harsh but fair analogy. The region has lost its soul.

People moving there have little intention of setting down roots and staying long term. People who have lived there long term are just waiting to cash out on their house and move far away and just hoping the local tech ecosystem doesn’t implode first. Employees think they’re playing the companies by taking big pay then getting out and going elsewhere. Companies think they’re playing employees by having a seemingly never ending supply of “miners” looking to live and work under conditions most “normal” people would laugh at. Yes, it’s a mess.

ryandrake3• 8 years ago

What’s wrong with planning to live somewhere until you retire, then moving to a lower col, lower taxes area? This is literally what most people do, at least in the US. I don’t know anyone who plans to live here long term. Why is that necessary for a region?

ummonk3• 8 years ago

I grew up here, and have always wanted to stay, but the affordability bar for that has been constantly going up. I switched into software engineering in the hope that I could afford to keep up with rising housing prices. I'm just hoping all the people planning to get out do so soon in the next recession. Because god knows the NIMBYs aren't going to allow enough housing for everyone in the meantime.

claydavisss2• 8 years ago

There's really no way to intellectualize it - people coming to the Bay Area in 2018 are suckers, plain and simple.

You missed the boat - by years. Not only will you never afford a home here, you will piss away so much money on rent and other aspects of the absurdly inflated cost-of-living adjustment that you won't be able to leave and buy anywhere else either. If you're coming up on forty and still renting your primary residence, you are in real danger of financially screwing yourself for life. Traditional models of retirement have people paying off their homes in full by around fifty so they can start building their retirement funds.

Forget about catching a break when the "bubble bursts"...the "bubble bursting" means most people reading Hacker News will be out of work or feeling very nervous about their jobs.

megaman82• 8 years ago

What the article is saying is, If you are young and have no family, you can rent a room really cheaply say 1400$ for a 1 bedroom, or bunk up with a mate for 700$ (2 people renting 1 room), and save most of your income for about 10 years - durring that time you can save about 500K. Then after that, get out and go anywhere but CA. In the rest of the US, you can buy a house for 300K and have a nice life.

The trick is, to not settle down. Don't get a wife or girlfriend or friends. If you that, you'll be able to walk away from it all very easily.

pm903• 8 years ago

The trick is, to not settle down. Don't get a wife or girlfriend or friends. If you that, you'll be able to walk away from it all very easily.

10 years without friends and partners (to use a gender neutral term) would literally be hell. Its not that hard to find a healthy mix and not bust your bank in the process.

rfdave• 8 years ago

I'm an experienced HW guy pondering this, My wife and I have kids out of college, so I'd be coming at this from the other end of the family pipeline.

jiveturkey6• 8 years ago

what’s wrong with working in the mines? everyone is afraid of working hard? my parents spent every ounce of their being working hard so their children could have a better life.

you think this is something difficult try on a true “work is life” existence like the people that made your phone and laptop.

and, no one is being marched here. no one claims it is better than a slow and steady and more well rounded life. i mean besides the incessant drone of pop culture.

just a couple of counterpoints to the developing arguments.

i do like how the article itself isn’t judgemental about t. it’s a fair piece.

throwaway5250• 8 years ago

If you don't have kids, and don't plan to, the Bay Area could be a fun ride. And if it turns out not to be, well, you can just lick your wounds and leave.

If you have kids, or think you might, you're doing them a grave disservice by moving to the Bay Area, given the alternatives currently available in America.

dnr• 8 years ago

The author seems pretty confused about the geography of the bay area, and comes to odd conclusions because of it. First of all:

Google programmers living two to three to a bedroom in Bernal Heights, not even that close to BART.

Why would Google employees care about living close to BART? They take the Google shuttle to work, and Bernal has great highway access, making it a shorter commute than other parts of SF.

Besides that, the people I know who have tons of roommates in SF do it because they want the experience of living in SF (culture, nightlife, food, socializing). If they just wanted to make money and save as much as possible, they'd live on the peninsula or in the east bay and have a more comfortable, and also cheaper, housing situation.

Even for people working in SF (SOMA), commuting on BART from Oakland is often faster than many parts of SF, and almost certainly cheaper. If you choose to live in SF anyway, it's because you want to be there specifically.

Treating the Bay Area as like working in the mines

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