Tech layoffs shock young workers, older people not so much
nytimes.com
nytimes.com
a) living paycheck to fat paycheck because of how they decided to misuse their compensation, i.e. luxury cars, getting the maximum mortgage the bank would allow for them and buying a house in the past year because of FOMO, etc.
b) those who have years of runway, and are only upset because they may have to sell off some of their ETFs to make ends meet if they can't find something in >1 year
Unfortunately, I see too many of my fellow devs fall into category a) and are really up a creek. The best thing to do when one lands a highly-compensated tech job (in the future at least) is to treat the "extra comp" as that: extra. Just max out the "mega backdoor Roth IRA" instead buying of a custom-wrapped Tesla.
Boomers left us with a housing shortage, education decline, health decline, public-pension deficits, unsustainable government deficit, trade deficit, and so much more.
Hopefully the younger generations can look towards reformation that while maybe painful for us makes our childrens, and their children's life better.
But there is no housing shortage. There was a shortage of listings for a period of time, not a structural shortage. Number of housing units per household is same as it was 20 years ago. 1.1:1
[Different metric, but gives an idea] https://fred.stlouisfed.org/graph/?g=MvZv
Prices in previous tech hub areas will fall drastically if remote work sticks, so won't be a problem for future residents of SF/Bay/Seattle/Austin.
I believe that specific piece of software is already being investigated by the Government for anti-competitive, price fixing like behavior
It would require a unilateral cartel without meaningful supply outside of that agreement to actually fix prices.
That being said, this kind of behavior should be subdued as much as possible, within reason
A lot of this is geographical monopolies and actual liquid stock is often quite limited, so long as price is set at the margin and the managed property is on that margin they can elevate the price. This is easy enough to do as low rent options don’t stay on the market. Plus non-managed properties will benchmark themselves against the market which includes the managed properties allowing for price leadership.
There is a whole zoo of anti-competitive behavior strewn through business that is tolerated due to the immense amount of money that is made that is beneficial to governments who tax it and politicians who receive donations. I don’t know how to fix it, step 1 seems to be fix political corruption and that already seems impossible. Once something becomes corrupted it’s very difficult to un-corrupt it.
you are factually inaccurate there, for most US metropolitan areas on the East and West coasts. In particular, the San Francisco Bay Area for sustained decade+, had several hundred thousand more available jobs than available places to live.
source: professional Urban Planners in California
And those jobs in SF are likely to go remote in large part, as we've already seen a strong transition towards. It's not very economically efficient to make employment contingent on location, so I'm doubtful that will continue to be the baseline model for white collar work.
Home prices in the Bay Area are driven by local employment, yet I can take the same job now and move to Texas and buy a 300k house rather than 3 million. The amenities and culture will develop over time.
Doesn't seem to be a very favorable outlook from a fundamental perspective for BA RE prices to me
That's not to say that other cities don't have a similar mix, but those other cities are not home to the headquarters of highly-paid software folks who all compete for housing. Even Seattle folks priced out can possibly afford places way up north in Everett or down south in Tacoma, if one absolutely must have a house for whatever reason. Even cities that are a heinous commute to Silicon Valley (e.g. Santa Cruz) are still wildly expensive.
The proper metric would be "population entering peak home-buying & child-rearing years / (deaths + population entering senior homes + new home construction)". I'm pretty sure that metric is pretty bleak just looking at the U.S. population pyramid:
It's 1.1 housing unit to 1 household, same as it was in 2001. You can corroborate with FRED data for total households vs total housing units
Demographics were favorable for demand for the past few years due to millenials reaching homebuying age, but they quickly shift against demand over the next decade due to large elderly population passing on and lower population growth. Not even considering that homebuilding is at an all time high
Assisted living is a money pit, and most boomers aren’t sitting on massive amounts of wealth.
(And all the computer companies were out in suburbs/exurbs anyway though finance was downtown of course.)
To get housing prices under control, it’s not going to be enough to tackle the supply side by building more housing. You also need to tackle the demand side by heavily taxing those knowledge workers so they have less disposable income to spend on housing.
There is a balance between overspending and forcing yourself to live uncomfortably just to save money.
Maxing out roth ira isn't that helpful for this situation given there is a 10% early withdraw penalty
At least for Seattle, it seems like the liability for the builder and the costs don't really justify building for less than some un-sellable amount (e.g. $1k / sqft) [0]
[0] https://www.reddit.com/r/SeattleWA/comments/wnkwvp/comment/i...
Most developer salaries put them well above the IRA limits, so having the option to save post-tax dollars in a Roth (which also has no RMDs, unlikely regular 401ks and IRAs) is a rare opportunity.
I may have never personally been laid off, but I have always saved, invested carefully and lived within my means, in anticipation of the next crash. So have many of my peers.
So this article does not ring true for me, unless it's simply saying "twenty-something gets laid off for first time, older person says welcome to the club', which isn't exactly news.
Nowadays you've got sites like Mr Money Mustache, which, while extreme, can at least present a kind of framework for being more mindful about spending and saving. I felt like I was just kind of making it up as I went along. You don't buy into someone else's idea of a lifestyle - make preparations for financial stability. Once that hits, everything else is gravy.
Was my first economic downturn a surprise? Sure, kinda. There was a lot going on that seemed really dumb, even to a relatively naive 19 year old. Had I also read about The Great Depression, the 70s gas shortage, and the 80s recession? Sure did. Hope for the best, but prepare for the worst.
Just because someone lived through the dot-com meltdown as a fairly young person doesn't make it easier to hand a new position relatively late career.
Maybe, layoffs during this cycle will prick that bubble that tech career is stable and leads to high payouts.
From what I've heard, during the dot-com bust it was much, much worse. People parked their luxury cars in the airport parking lots and literally walked away from them. Lots were overflowing with abandoned cars.
Luckily he graduated just in time a bit under a year ago and managed to sneak right before the hiring freezes happened.
IMO the most stable careers in terms of good demand and pay continue to be nursing and doctor (though probably more stressful and less flexibility)
https://www.npr.org/2020/05/10/853524764/amid-pandemic-hospi...
The healthcare industry is not as rosy as you imagine. Yes, demand is inelastic, but stuff like this still happens.
It's often much more profitable from a payoff/effort ratio to become something like a Physician's Assistant / Nurse / Lab Tech than to become an actual Doctor nowadays.
Layoffs at Tech Giants Reverse Small Part of Pandemic Hiring Spree
Some of the biggest tech companies have announced tens of thousands of job cuts. But even after the layoffs, their work forces are still behemoths.
What happens remains to be seen but so far it's mostly retrenching of big increases.
Wages have been rising quickly on average, retail spending is still quite high relative to pre-covid trends, employment has been strong (outside of VC/big tech).
You see headlines about 10k here or 20k there, but in the end there's over 100m jobs in the US economy. The layoffs aren't meaningfully large in and of themselves
It remains to be seen how much worse it gets over the next year or two (if at all).
https://medium.com/@davenixon_44904/how-to-find-a-job-when-y...
TLDR: avoid changing from homeowner to renter if at all possible - convert your normal IRAs to ROTH during any lean low-tax years - learn the hottest new skills to get rehired
I remember, during the dot com boom of the late 90s, how much my impressions of the working world differed from people who graduated just a few years after me. I graduated from UCSD into the recession of the early 1990s, and I was living in SoCal, which was unusually hard hit. Graduates of very elite colleges were getting career-building jobs (UCSD is well regarded, but it wasn't quite in the tier to provide that immunity), and very in demand STEM majors were still getting good offers, but a lot of college grads were stringing together multiple service industry gigs. I'm really not kidding when I say that 5 years later, English majors thought the main difference between college and the working world is that now you can easily find well-paid work in media companies and your employer pays for the booze and parties (though finding an apartment in SF was a nightmare compared to the recession).
I suspect it's this way for people who graduated on the wrong side of the 2008 banking crisis as well. It's not Gen X or Millennials or Z, it's a much narrower time frame.
Some of this is definitely about resilience. I personally allowed it to affect me too heavily. I went back to college to study engineering and never really managed to shake the belief that I'm only as employable as my most up-to-date hard skills. The idea that a smart person can enter a new field and learn on the job... I know it's true, but I've never quite been able to really believe it. This has made me too conservative.
Not everyone from my cohort responded this way, but I do think it's more likely among people whose first few formative years in the workforce happen during a very poor hiring climate. The thing is, as I learned from he next bust - if you have a job before the recession, you often manage to hang onto it, and by the time the next boom rolls around, you're well positioned to take advantage. Even if you lose your job after a couple of years, you have some experience locked in, and you understand how it all works, and you know that there really are jobs, that things will improve, and that you just need to weather the storm. But for people who've never really experienced anything else, I think it creates higher risk mental habits of risk aversion that can be hard to shake. I also think that once a better hiring climate resumes, employers are more likely to go to colleges to recruit for entry level positions, and tend to overlook people who graduated several years earlier but lack relevant experience.
I've read that this effect is much more muted among very elite college grads, and I strongly suspect the same is true for a few very in demand STEM majors at non-elite colleges. Since this is hacker news, I can describe it as a vector field. People who are just on the wrong side of the line can get swept into a completely downward vector field than people just a couple spots before or after on the X-axis. Very elite college grads and some STEM majors can re-enter that positive, upward vector field at a later date.
[1] https://siepr.stanford.edu/publications/policy-brief/recessi...
That's probably true. There's machinery at colleges to feed graduating seniors into the professional hiring pipeline. Someone who has been underemployed at jobs that may not be professionally relevant has far less access.