This reminds me of my first visit to Dallas in the summer decades ago. I was there for a meeting and I stayed at a hotel almost across the street from where my meeting was supposed to take place. I was advised to take a cab to the meeting. When I left the hotel in the morning, I thought I could just walk over to the meeting. So I walked, but by the time I got there, I was wet inside and out. I wish I had paid more attention to the advice.
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Itâs awfully humid down there. And to think it can get in Houston and Miami.
My son just finished first quarter at one of the flagship state universities in CS major as freshman. He was already contacted by Google, Intel, and a few more corporations, not for the recruitment yet, but it was like introduction to keep in touch. A large national bank and a real estate group also sent a message about internship. So, the university brand name counts, but it doesnât have to be HYPS, any state flagship universities would do.
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Freakonomics is currently doing a podcast titled âWhy is everyone moving to Dallas?â at Why Is Everyone Moving to Dallas? - Freakonomics . I listed to part 1 a few days ago. Part 2 will air later.
Some of the reasons given were the charm, quality of city life (museums, symphony, âŠ), low cost of living (compared to other cities), quality tech jobs, and having no state income tax (CA tax is >9% on >$60k). After listening to the podcast, I can see the appeal for some, but itâs not for me. I prefer the mild SD climate and am willing to take a pay cut after considering cost of living + taxes, for that benefit.
I know a firm headquartered in Dallas, which wanted to consolidate its offices, by moving some of its key employees from NYC, LA, etc. to Dallas. However, none of these employees agreed to move, even with all the financial incentives.
Food (both groceries and eating out) is dramatically more expensive - itâs now hard to get a meal for two in SF for much less than $200. Entertainment is far more, other services like cleaners, haircuts etc are twice as expensive. Gas is approaching $5 per gallon and utilities cost significantly more. Medical bills are higher too. And thatâs without counting things that donât typically apply to a new graduate like childcare.
If you spend 7 days a week on a corporate campus with food and everything else provided, take the shuttle to and from work, and never do anything else, your costs might be only $50K more pre tax. But most people arenât hermits and want to enjoy themselves with that high salary, so definitely wonât be left with the rest of that money. And many of the services on that corporate campus arenât accessible when you are working from home.
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We are living in different universes. I am sure we can always find expensive places to eat. This is not day to day. In the bay area, which is where a lot of tech is, I occasionally get a meal with friends that have been in the industry a long time in very senior positions, and they donât spend $100 a head. By a wide margin. A basic way to look at the situation is to ask what is the revenue that is being generated by the company per head. And then the company pays out some % of that as salaries. If you are working in Atlanta with many of the companies in old line industries, they just cannot afford to pay you that much. Here is a link to what revenue per worker is by company. Revenue per Employee [The Added Value of Labor] Even here not all the companies will share sufficiently with employees â auto companies etc, where they also need a lot of capital investment apart from just the employees. But at least, if they are making money, there is something to give. You will notice that the top of the pile is Tech and Finance. On the coasts. Much of the value add is coming from employees. And they get to take home a lot.
Using Seattle as a proxy, Iâd say this isnât that far off, so I guess it depends on where we all tend to eat. We have a favorite couple of restaurants in a burb north of the city. By the time weâve had a glass of wine each and any appetizer and meal, weâre pushing to $200. If we were in the city at a nice restaurant, weâd clear 200 easy just the two of us.
Heck, we ate at 5 Guys last night : one cheese burger, one lettuce wrap cheeseburger, one large fry and one standard milk shake: $41.00.
Yep. Looking at our bill last weekend (nothing fancy, pre-theater dinner): starters $15-$20, mains $25-$40, desserts $12-$18, wine $13-$20 per glass. But when you add the ~10% sales tax, a 5% surcharge for SF âmandatesâ and they âsuggestâ a minimum 20% service charge on top of the post tax and mandate bill, even $65 per head for food and drink (two not three courses) ends up as $180. Itâs at least 20% more than when we went there pre-pandemic.
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You chose basic 1-bedrooms in your example. Some tech employees in the salary ranges we have been discussing do live frugally in basic 1 bedrooms, but there are also a good portion on the other extreme who do not live frugally in basic 1 bedmrooms and instead spend money as fast as they earn it⊠sometimes faster, more as much as they are allowed to borrow. Iâve known well compensated tech employees who live paycheck to paycheck.
A simple cost of living calculator will not be accurate for all employees. Instead it depends on the characteristics of the particular employee â what type of housing they choose, how often and where they eat, pay for entertainment, go to clubs, etc. The cost of living calculator will overestimate for some and underestimate for others, but either way, there is a notable cost of living difference that should be considered when comparing salary between the 2 locations.
Average revenue per worker often has little relationship to salary of a particular employee. Revenue is not the same as profit or long term future value, and different employees at a particular company are often compensated completely differently from one another. Itâs best to instead look at the actual salaries/earnings.
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Profit is not always the metric because if people themselves are the main cost, as it is often the case in tech, then revenue is the correct metric. We obviously make adjustments for chemical factories etc.
If my kids go into the workforce, I donât expect them to spend $200 for 2 the first year. They can keep it down. When they start earning 1-2mm a year, if they every do, then they can spend more. We are trying to capture the economics of a new grad. Our spending levels as older adults is not necessarily the benchmark.
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I understand all that. Really, I do. But Iâm wondering if you understand mine. When we interpret data, we should also interpret the interpretation. Data is helpful, but putting it in proper context is essential. Said another way, that higher starting salary has a story to tell beyond the fact that itâs just higher.
âROIâ means âwhatâs a good place to study CS relative to the cost of attending .â But then you have to ask yourself, what âgood placeâ means. Certainly for the average poster here, that means job placement. For some posters, thatâs really all it means. So assuming that job placement is important, what better indicator of a schoolâs quality than that they consistently place people in the most competitive markets? We know from CC that firms are not hiring them because of Ivy League prestige. Then it must be that they tend to do well.
If the GT kids stay in Atlanta and donât venture out much (I have no idea), then maybe thatâs a slight mark against GT because theyâre not being heavily represented in arguably the most important markets for that talent.
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This relates to why I stated âor long term future value.â A company can have a high revenue per employee, but be operating an extreme loss and have little future value, such that the company is expected to fail in matter of months.
Thatâs a fair point, although waiting until you make $1 or $2 million a year before going out for a $200 dinner seems extreme.
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Most of my friends who are not in NY for Fin or CA for Tech have career regrets :-). Thatâs just a fact. The networth of folks who are in CA is usually 5x to 10x more. They can retire and move out and keep the 10x at some lower cost of living place.
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I was trying to make a point. Although I tell the kids that if they want to save for private schools etc for their kids, they real need to keep a lid on things.
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Without question. For CS, the University of Washington will get you anywhere you want to go.
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Ha, we were the oldest people in the restaurant. It was all young tech people, couples on dates, etc. Not necessarily the first year out of school, but plenty of young tech workers earning $200K+ per year are out enjoying themselves (and drinking rather more than one glass of $15 wine) on a Saturday night.
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Understood.