7 ms·

I'm not sure what the average poster here on HN makes, but if I assume that it's ~$250K for the employees living in SF, you could move to St. Louis, MO, have yo

I'm not sure what the average poster here on HN makes, but if I assume that it's ~$250K for the employees living in SF, you could move to St. Louis, MO, have your salary adjusted to $225K, get a $20K bonus for moving, and your 225,000 St. Louis dollars would be equivalent to 513,369 San Francisco dollars. I get that a 10% annual salary hit is larger than $20K for a lot of people, but the cost of living in these areas is over 100% larger than most other cities in the country. I would take that deal in a heartbeat.

lotsofpulp 6y ago
People perceive a lower probability of advancement in other regions, and lower probability of securing similar employment in the event of turbulence at your employer. It's a personal decision how much value to assign to these possibilities, but obviously it's significant enough to sufficient people that Stripe is having to offer extra incentive to move. Although the above is not the only factor. Obviously there are things like weather, geographic amenities, politics, etc to consider.
onlyrealcuzzo 6y ago
I think this really depends on your lifestyle. I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems. If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary. I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis. That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise. Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power. For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world. Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.
- baskire 6y ago
  Don’t forget owning a house the “cost” is mortgage INTEREST, property tax, and insurance premiums for owning. With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad. I did the math and owning is cheaper than renting in just a few years.
  - eru 6y ago
    Even without mortgage interest, owning a house outright has an opportunity cost. Since you could use that capital elsewhere instead.
  - DavidPeiffer 6y ago
    >...and California home insurance stupidly low (50$/month for 1+ million house). This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.
    - onlyrealcuzzo 6y ago
      Because California houses aren't worth any more than Iowa houses, and you don't really need to insure land very much. All the value is the land. And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.
    - baskire 6y ago
      Earthquake damage isn’t covered. And California has relatively dry mild weather. And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+. Chance of needing a rebuild are very, very, low.
smabie 6y ago
I know I'm weird, but I care about how much I get paid because that's how I keep score. It's how I know my employer respects me. It's almost immaterial to me that I actually receive or use that money. So, I know this is stupid, but moving, getting 20k, and taking a 10% salary hit would piss me off, even if I essentially became "richer."
- test1235 6y ago
  >I know I'm weird, but ... that's how I keep score. That's not so weird - many CEOs work that way.
- Sholmesy 6y ago
  Just an FYI, this person has opened up and expressed a genuine opinion, and has not violated any rules. Please don't downvote people for this, otherwise you might not get this sort of insight.
- mlthoughts2018 6y ago
  It’s not weird at all. Your engagement with your employer is about how they value your labor output and how you value your time. That’s it. Unless a job has a clear business reason for being tied to a geographic location or externality, there is zero legitimate basis for an employer to factor your location in. If they are saying the market rate suddenly changed and they can hire a cheaper person from somewhere else, then thank them for the opportunity, wish them luck and hand in your resignation letter. You’ve already been delivering value in a way that makes them happy to pay your total comp. Merely switching geography has changed no part of that (unless they are saying they want to replace you, in which case, good luck to them).
balfirevic 6y ago
> 225,000 St. Louis dollars would be equivalent to 513,369 San Francisco dollars. Does that include your car, tech gadgets and vacation dollars?
swyx 6y ago
you're only accounting for salary here. there are a lot of non immediate and non monetary benefits that naturally arise that come out of living in a tech hub and you are advising people to value that at zero. I'll believe it's zero the day the Collisons themselves leave SF.
rjpn 6y ago
Not just that, CA has 11% state tax. If you move a state with lesser state tax you will save on top of that. Most people are moving to Nevada which has no state tax. This could be huge saving.
bby 6y ago
My guess is average HN poster, who is deep in tech and probably senior, makes around 300-500k Total Comp.
cwhiz 6y ago
Most of that income difference is tied up in the costs to buy a home. I find the arguments on this topic to be fairly silly. If I moved from NYC to St Louis I could take my rent payment and go buy a house. I’ve upgraded but my housing expenses are the same. Then if I wanted to move back to NYC I would need to double or triple my income to purchase something relatively equivalent. Or I could just move back into my old apartment. The actual costs on the ground for most people are going to be way more similar than these COLA calculators will show. People won’t live their exact same lives with the exact same luxuries. The biggest actual difference is taxes. However, the big downside and risk here is that you’ll be living in St Louis with an SF salary. You will not find a similar salary in St Louis. If you want to quit your job and maintain your standard of living you’re left with some tough choices.
dgellow 6y ago
Those SF salary numbers are always so insane, from the point of view of someone in Europe. I never know how to process them.
stlthrowaway2 6y ago
Honestly I wish stripe would give people like myself who live in St. louis a chance to work for them -- i've applied twice and couldn't get an interview despite being (I think?) qualified. I love living here, don't want to move to SF... I think with more remote work we will see companies leveraging talent in places like St. Louis. Probably easier than paying someone to leave.
MuffinFlavored 6y ago
i’m pretty sure $250k in SF becomes closer to $80k in St. Louis according to https://www.bestplaces.net/cost-of-living/san-francisco-ca/st.-louis-mo/250000 https://www.bestplaces.net/cost-of-living/san-francisco-ca/s...
dmode 6y ago
Yeah, but happens when the said person is laid off. Are there other companies in St Louis that will match that pay ?

lotsofpulp 6y ago

People perceive a lower probability of advancement in other regions, and lower probability of securing similar employment in the event of turbulence at your employer. It's a personal decision how much value to assign to these possibilities, but obviously it's significant enough to sufficient people that Stripe is having to offer extra incentive to move. Although the above is not the only factor. Obviously there are things like weather, geographic amenities, politics, etc to consider.

onlyrealcuzzo 6y ago

I think this really depends on your lifestyle. I save > 60% of my post-tax income. I'm able to do this because, 1) luckily, I make a lot of money, and 2) I don't have any dependents or health problems. If I moved to St. Louis, I'd save an extra ~$2k a month in taxes, which is basically the cut in salary. I /only/ spend $40k a year outside of housing (I realize this is a lot). A lot of that /was/ on traveling to see friends and family, and about 10% of that is utilities, car payments, etc - things that don't really change. Let's say $20k of my spending is on local services like entertainment and restaurants and general shopping. Let's say that's 30% cheaper in St. Louis. That's $6k in savings. Plus another ~$1-2k per month in rent. Absolute tops, that's $30k per year. For context (not to brag), this is not much much more than my annual raise. Sure, if you have a giant house and several dependents, and spend ALL of your post-tax income - living in Saint Louis could offer you twice as much spending power. For a lot of people, it doesn't. Most of their money goes toward investments, and I can't buy investments any cheaper from Saint Louis than I can anywhere else in the world. Finally, if you own, even with the $12k limit on SALT, the fact that Mortgage Interest is deductible makes the difference in housing not as extreme as it might appear if you make a lot of money. Also, a lot of places with very high housing prices - unsurprisingly - have really low property taxes.

baskire 6y ago
Don’t forget owning a house the “cost” is mortgage INTEREST, property tax, and insurance premiums for owning. With interest rates at 3%, property tax fixed to track inflation for life thnx to prop 13, and California home insurance stupidly low (50$/month for 1+ million house). It’s not that bad. I did the math and owning is cheaper than renting in just a few years.
- eru 6y ago
  Even without mortgage interest, owning a house outright has an opportunity cost. Since you could use that capital elsewhere instead.
- DavidPeiffer 6y ago
  >...and California home insurance stupidly low (50$/month for 1+ million house). This is the first I've heard of stupidly cheap home insurance. I'm sitting here in Iowa paying about 8x by value. Why is it so cheap? I don't present earthquake or wildfire risk, and almost nobody has pools...which are all decent risk factors.
  - onlyrealcuzzo 6y ago
    Because California houses aren't worth any more than Iowa houses, and you don't really need to insure land very much. All the value is the land. And the land mostly has high values because of low property taxes combined with Prop 13, artificially low interest rates, and the difference between capital gains and income taxes.
  - baskire 6y ago
    Earthquake damage isn’t covered. And California has relatively dry mild weather. And we are talking about a 1.5 million dollar house in Bay Area being 1000 sqr ft with insurance rebuild cost of 300k+. Chance of needing a rebuild are very, very, low.

smabie 6y ago

I know I'm weird, but I care about how much I get paid because that's how I keep score. It's how I know my employer respects me. It's almost immaterial to me that I actually receive or use that money. So, I know this is stupid, but moving, getting 20k, and taking a 10% salary hit would piss me off, even if I essentially became "richer."

test1235 6y ago
>I know I'm weird, but ... that's how I keep score. That's not so weird - many CEOs work that way.
Sholmesy 6y ago
Just an FYI, this person has opened up and expressed a genuine opinion, and has not violated any rules. Please don't downvote people for this, otherwise you might not get this sort of insight.
mlthoughts2018 6y ago
It’s not weird at all. Your engagement with your employer is about how they value your labor output and how you value your time. That’s it. Unless a job has a clear business reason for being tied to a geographic location or externality, there is zero legitimate basis for an employer to factor your location in. If they are saying the market rate suddenly changed and they can hire a cheaper person from somewhere else, then thank them for the opportunity, wish them luck and hand in your resignation letter. You’ve already been delivering value in a way that makes them happy to pay your total comp. Merely switching geography has changed no part of that (unless they are saying they want to replace you, in which case, good luck to them).

balfirevic 6y ago

> 225,000 St. Louis dollars would be equivalent to 513,369 San Francisco dollars. Does that include your car, tech gadgets and vacation dollars?

swyx 6y ago

you're only accounting for salary here. there are a lot of non immediate and non monetary benefits that naturally arise that come out of living in a tech hub and you are advising people to value that at zero. I'll believe it's zero the day the Collisons themselves leave SF.

rjpn 6y ago

Not just that, CA has 11% state tax. If you move a state with lesser state tax you will save on top of that. Most people are moving to Nevada which has no state tax. This could be huge saving.

bby 6y ago

My guess is average HN poster, who is deep in tech and probably senior, makes around 300-500k Total Comp.

cwhiz 6y ago

Most of that income difference is tied up in the costs to buy a home. I find the arguments on this topic to be fairly silly. If I moved from NYC to St Louis I could take my rent payment and go buy a house. I’ve upgraded but my housing expenses are the same. Then if I wanted to move back to NYC I would need to double or triple my income to purchase something relatively equivalent. Or I could just move back into my old apartment. The actual costs on the ground for most people are going to be way more similar than these COLA calculators will show. People won’t live their exact same lives with the exact same luxuries. The biggest actual difference is taxes. However, the big downside and risk here is that you’ll be living in St Louis with an SF salary. You will not find a similar salary in St Louis. If you want to quit your job and maintain your standard of living you’re left with some tough choices.

dgellow 6y ago

Those SF salary numbers are always so insane, from the point of view of someone in Europe. I never know how to process them.

stlthrowaway2 6y ago

Honestly I wish stripe would give people like myself who live in St. louis a chance to work for them -- i've applied twice and couldn't get an interview despite being (I think?) qualified. I love living here, don't want to move to SF... I think with more remote work we will see companies leveraging talent in places like St. Louis. Probably easier than paying someone to leave.

MuffinFlavored 6y ago

i’m pretty sure $250k in SF becomes closer to $80k in St. Louis according to https://www.bestplaces.net/cost-of-living/san-francisco-ca/st.-louis-mo/250000 https://www.bestplaces.net/cost-of-living/san-francisco-ca/s...

dmode 6y ago

Yeah, but happens when the said person is laid off. Are there other companies in St Louis that will match that pay ?