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I think its a lot more complex than that. If the cost of beef was increased 4x for whatever reason, then most people would just switch their preference for mea

I think its a lot more complex than that. If the cost of beef was increased 4x for whatever reason, then most people would just switch their preference for meat. There are ofcourse a lot of greedy companies. But a lot of the time the consumer demands a price point for software product, many startups cannot afford to pay 400K to developers. I think its not a reflection of how difficult it might be to create software but stagnant wages for the average person.

vonmoltke 10y ago
I agree with everything you say about the economics of the situation, but ours is the omly industry I know of where inability to make enough money to pay for a sufficient workforce translates into a workforce shortage. A cattle rancher isn't going to compalain about a "ranchhand shortage" if she can't afford to pay enough to attract them.
- TrickzOnU 10y ago
  It is not. The rancher would just hire an illegal immigrant often and it happens all the time on farms and restaurants. It doesn't fly in office environments and in positions where the salary cant just disappear in the books. Secondly, only the technology industry has a massive pipeline of overseas workers available...so naturally there is constantly a "shortage" as a means to increase the pipeline of overseas workers. I'm not saying NOT to hire overseas workers. I'm saying to be honest about it. Say -- we refuse to pay market wages and would rather that new graduates not find work than pay them a living wage for the Bay Area, instead we'll hire offshore workers desperate to flee their countries and willing to shack up 3 to a studio apartment.
  - a3n 10y ago
    The whole thing is based on unrealistic expectations. People work somewhere in the Bay Area, or launch a startup there; it's one of the most expensive areas in the country, maybe the world. Then they don't want to pay enough so that there is no shortage of employees. So then the talk turns to bringing in H1Bs who will work for the low end of the "prevailing" (Ha!) salary. Why don't these companies cut to the chase and just open an office in India? Or have the entire operation there? Or are some of them actually not trying to change the world by delivering better toast to your door, and they just want to live in the Bay Area?
    - ryanSrich 10y ago
      It's a form of off shoring. They create a fake shortage, lobby for more H1Bs, pay the national average for fair market, which is laughably low for the Bay Area, and there you have it. The tech shortage sponsored by Facebook...
  - illegalFallacy 10y ago
    >It doesn't fly in office environments This is untrue in my experience as the equivalent in an office environment to hiring an illegal immigrant would be subcontracting a 'job' to either a staffing agency whose H1B employees get paid piecemeal and billed out for different amounts. I've also worked with independent contractors who if you added up their low pay on the level, wouldn't be making adequate pay. Heck, I've worked contract jobs through staffing agencies trying to make end meets and had the job location charge for parking which would be reimbursed 3 months later. Good luck getting ur money if you are working the next job and can't afford the time to follow up for that check. There are plenty of ways companies dance around the same entity of illegal immigrant wages.
- acjohnson55 10y ago
  To be fair, that is literally what a shortage is, economically speaking.
branchless 10y ago
The system of usury against land ensures that land costs adapt to absorb all available income after food/clothing/energy costs have been accounted for. Why is silicon valley more expensive to rent in? Because people came with money and the banks agreed to loan at a multiple of the new wage ceiling. If wages increase x4 guess what will happen? We need to stop banks creating debt to issue against land otherwise it will always absorb all income. And therefore all productivity gains flow to the land owner.
- branchless 10y ago
  Would love to know how anyone could downvote this! Come on, let's hear how rents are not tied to wages in a thread about remote working providing higher wages than the local area but lower wages than the hot-spot. Let's hear it HN.
- metafunctor 10y ago
  This seem to be exactly how it works. A lot of states and countries have tried to fix the problem by introducing housing benefits – but guess who, in the end, gets that money?
  - branchless 10y ago
    Housing benefit is the worst thing you can do. It's landlord benefit. Land value tax is the way forward.
- hueving 10y ago
  >Why is silicon valley more expensive to rent in? Because supply and demand. High salaries attract a lot of people to the bay and communities systematically refuse to build new housing to meet the demand so the price goes up. You can do whatever you want to the banks but that won't change the fundamental of 2X people trying to live in X houses.
  - branchless 10y ago
    No, many hot-spots have large rentier presence including people "owning" and renting out multiple residencies which causes huge supply pressure. Credit also typically increases ahead of wages which squeezes people further. This isn't supply of people vs supply of homes, this is supply of credit. If you neutralise this you will see prices fall and be paying less of your labour to banks. 2008 - the credit taps ran dry => huge crash. Before that near unlimited credit saw land prices increase hugely. Neither on the up or the down did we see wages have such volatility.
ta_donk_gt 10y ago
> many startups cannot afford to pay 400K to developers. Then hire remote devs. Or move your startup to a more affordable location. If you need to have developers work onsite, and you need to be in the Bay Area, then you need to pay accordingly.
conjectures 10y ago
> many startups cannot afford to pay 400K to developers It's a good point, but I wouldn't expect a construction company that could only pay 20% of cost to hire cranes to complete many buildings. So maybe startups in that bracket just aren't viable under their current models. Maybe they need to rethink their salary/equity mix to make up for lack of cash.

vonmoltke 10y ago

I agree with everything you say about the economics of the situation, but ours is the omly industry I know of where inability to make enough money to pay for a sufficient workforce translates into a workforce shortage. A cattle rancher isn't going to compalain about a "ranchhand shortage" if she can't afford to pay enough to attract them.

TrickzOnU 10y ago
It is not. The rancher would just hire an illegal immigrant often and it happens all the time on farms and restaurants. It doesn't fly in office environments and in positions where the salary cant just disappear in the books. Secondly, only the technology industry has a massive pipeline of overseas workers available...so naturally there is constantly a "shortage" as a means to increase the pipeline of overseas workers. I'm not saying NOT to hire overseas workers. I'm saying to be honest about it. Say -- we refuse to pay market wages and would rather that new graduates not find work than pay them a living wage for the Bay Area, instead we'll hire offshore workers desperate to flee their countries and willing to shack up 3 to a studio apartment.
- a3n 10y ago
  The whole thing is based on unrealistic expectations. People work somewhere in the Bay Area, or launch a startup there; it's one of the most expensive areas in the country, maybe the world. Then they don't want to pay enough so that there is no shortage of employees. So then the talk turns to bringing in H1Bs who will work for the low end of the "prevailing" (Ha!) salary. Why don't these companies cut to the chase and just open an office in India? Or have the entire operation there? Or are some of them actually not trying to change the world by delivering better toast to your door, and they just want to live in the Bay Area?
  - ryanSrich 10y ago
    It's a form of off shoring. They create a fake shortage, lobby for more H1Bs, pay the national average for fair market, which is laughably low for the Bay Area, and there you have it. The tech shortage sponsored by Facebook...
- illegalFallacy 10y ago
  >It doesn't fly in office environments This is untrue in my experience as the equivalent in an office environment to hiring an illegal immigrant would be subcontracting a 'job' to either a staffing agency whose H1B employees get paid piecemeal and billed out for different amounts. I've also worked with independent contractors who if you added up their low pay on the level, wouldn't be making adequate pay. Heck, I've worked contract jobs through staffing agencies trying to make end meets and had the job location charge for parking which would be reimbursed 3 months later. Good luck getting ur money if you are working the next job and can't afford the time to follow up for that check. There are plenty of ways companies dance around the same entity of illegal immigrant wages.
acjohnson55 10y ago
To be fair, that is literally what a shortage is, economically speaking.

branchless 10y ago

The system of usury against land ensures that land costs adapt to absorb all available income after food/clothing/energy costs have been accounted for. Why is silicon valley more expensive to rent in? Because people came with money and the banks agreed to loan at a multiple of the new wage ceiling. If wages increase x4 guess what will happen? We need to stop banks creating debt to issue against land otherwise it will always absorb all income. And therefore all productivity gains flow to the land owner.

branchless 10y ago
Would love to know how anyone could downvote this! Come on, let's hear how rents are not tied to wages in a thread about remote working providing higher wages than the local area but lower wages than the hot-spot. Let's hear it HN.
metafunctor 10y ago
This seem to be exactly how it works. A lot of states and countries have tried to fix the problem by introducing housing benefits – but guess who, in the end, gets that money?
- branchless 10y ago
  Housing benefit is the worst thing you can do. It's landlord benefit. Land value tax is the way forward.
hueving 10y ago
>Why is silicon valley more expensive to rent in? Because supply and demand. High salaries attract a lot of people to the bay and communities systematically refuse to build new housing to meet the demand so the price goes up. You can do whatever you want to the banks but that won't change the fundamental of 2X people trying to live in X houses.
- branchless 10y ago
  No, many hot-spots have large rentier presence including people "owning" and renting out multiple residencies which causes huge supply pressure. Credit also typically increases ahead of wages which squeezes people further. This isn't supply of people vs supply of homes, this is supply of credit. If you neutralise this you will see prices fall and be paying less of your labour to banks. 2008 - the credit taps ran dry => huge crash. Before that near unlimited credit saw land prices increase hugely. Neither on the up or the down did we see wages have such volatility.

ta_donk_gt 10y ago

> many startups cannot afford to pay 400K to developers. Then hire remote devs. Or move your startup to a more affordable location. If you need to have developers work onsite, and you need to be in the Bay Area, then you need to pay accordingly.

conjectures 10y ago

> many startups cannot afford to pay 400K to developers It's a good point, but I wouldn't expect a construction company that could only pay 20% of cost to hire cranes to complete many buildings. So maybe startups in that bracket just aren't viable under their current models. Maybe they need to rethink their salary/equity mix to make up for lack of cash.