Average Silicon Valley Tech Salary Passes $100,000 | Hacker News Reader

Average Silicon Valley Tech Salary Passes $100,000

online.wsj.com

69 pointsyogrish93 comments

I'd just like to point out that this article is written by an author who almost always "get's it wrong." I've even been in a couple of her stories. They are always PR pitched and biased. VC funding stops. VC funding starts. Building is hotbed for Tech Startups. Etc. Etc. So Dice pitched a story, that doesn't make it true.

See for yourself and with the benefit of hindsight, see if you agree with her stories: http://online.wsj.com/search/term.html?KEYWORDS=PUI-WING+TAM...

Executive and management level IT salaries along with experienced project managers have gone through the roof. The type of jobs where positions are filled via reference or headhunting rather than advertised.

From my experience and knowing what some friends are earning, these types of positions are paying up to double what they were 5 years ago. A lot more stock is also being offered in angel funded and Series A companies to attract the right people.

I know a handful of experienced people in this field who are contracting out at $40k+ a month. One person I know recently switched from $35k+ a month on a contract and was poached at $90k+ a month.

Were those last three numbers for technical positions, senior management, or for sales/marketing?

product lead or management with strong technical backgrounds, or name-brand specialists (meaning they are 'famous' or 'known' by name) in a certain field

Holy fuck. With the current exchange rate, this translates into a monthly salary of 59 000 Swedish crowns. This is a VERY respectable salary here, in any field.

Hell, I know plenty of programmers working for half that. Which is still considered very decent pay.

How can you Americans get paid so much? Where is the imbalance? On your side? On our side? If the latter, how can we (the rest of the world) take advantage of this?

As a Norwegian I was thinking the exact same thing, ref. my comment about cost of living differences in the other comment tree. And this is the _average_ salary we are talking about. Granted, Americans work longer hours and have fewer holidays...but the difference can't be _that_ large. Maybe it's time to relocate.

But you're also not paying ~17000 kronor a month in rent, are you?

If you have a company in an area where the rent levels (and cost of living in general) are high, you will have to pay high salaries if you want to have any employees at all. But presumably having a company in the area allows you to generate more wealth than you would in any other area, which offsets the salaries.

The only way you can take advantage of it is by moving to such a place. But note that companies are taking advantage of the reverse by moving their offices to places where the cost of living is lower, which means they can lower their salaries.

Maybe companies could build semi-permanent barracks near their offices or something? :p

Take a page from the US Army, they know how to rapidly set up living quarters for large numbers of people.

http://upload.wikimedia.org/wikipedia/commons/3/3c/Military_...

Would it be nice to live in such a place? Maybe not, but it would eliminate rent and the commute time. Also, living in a code-tent seems pretty bad ass (at least after it's over).

A more humane version might be to just rent a large villa and stuff all the programmers in there. Aren't there a lot of abandoned McMansions in the US?

Point is: from an operations perspective, there should be a more optimal solution than pissing away $50k a year on single-bedroom apartments. If a company were to come up with a smarter solution, the programmers could make more net money while being paid a lower gross income.

The latest Economist special report touches on this in Russia, where companies needed to support workers in the middle of nowhere:

  A visit to the headquarters of Russian Railways can feel a 
  bit like a voyage back in time. The guards wear the peaked 
  hats and gruff manners of the Soviet era. A display shows 
  the children of railway workers triumphing in chess and 
  athletics. Vladimir Yakunin, the company’s boss, started 
  his career with the KGB. He concedes that his company is a 
  giant of an organisation: it has 1.2m employees, 20,000 
  stations, 86,000km of track, a network of schools and 
  health clinics and even an equestrian school.

  ...

  He also points out that some of the oddities of his 
  company, such as its schools and clinics, have been around 
  for a century and derive from the difficulties of running a 
  railway in the middle of nowhere. There is no such thing as 
  pure capitalism or pure socialism, he argues; only more or 
  less sensible solutions to practical problems.

http://www.economist.com/node/21542929

I do believe you cap out the taxes in Sweden at ~50k SEK/m so you would end up paying 52-59.9% in income tax on that figure. And if you live in Stockholm you pretty much CANNOT get anything decent to rent so you are forced to buy.

A one bedroom flat at 34 m^2 in a good Stockholm location you might be looking up to $300,000.

But no healthcare costs so it probably averages out in the end :o

Even if you pay U$3k a month in rent, that's U$64k to live on.

It's not unusual for rent/mortgages to eat up 30-50% of someone's income in most of the world.

That's a 100k gross salary. I don't live in CA, but I'd guess about 30-40% overall tax rate including state tax. That leaves the earner 60k-70k overall to live on. That rent is >= 50% of their income.

Don't forget about income taxes, that'll skew that more toward the 50% mark .

In practice it's more like 80 000 SEK per month. I used to live in Sweden and while the exchange rate was 6 crowns to a dollar, the buying power of 10 crowns equaled the buying power of a dollar. Just look at fast food. 5 bucks can get you a decent meal in the US at a fast food joint, about what you could get for 50 crowns on Sweden.

As far as rent goes, it really is much worse in CA. I lived in a studio apartment in Stockholm right by Karlaplan ( very ritzy area ) and paid 10k/month SEK. To get something like that in SF would be much more.

Tell me more about your experience in Sweden :)

Always interesting to hear from hi-tech SFites who have been to this corner of the world.

See the comments above regarding ridiculous rents and taxes. After all that it we're really talking about ~$50k or less take home pay, decent but not great. Still I'd expect there to be more activity and competition in tech jobs in SV vs. Sweden.

If the latter, how can we (the rest of the world) take advantage of this?

Focus on growth rather than equality.

That kind of salary is not unheard of in Stockholm.

Average Silicon Valley Tech Salary Passes $100,000.

And Silicon Valley remains the only place in the country where prices are such that $100,000 is barely getting by.

Thats part of the 'tragedy' of it (Ok making over a 100k isn't a tragedy) but being that SV is so tech worker heavy the costs shoot up and quickly eat into the salary gains. If you want to see hockey stick growth look at the rising cost of rent.

If you can swing it the sweetest deal you can get is to work remotely for a company in SV with the SV salary.

Semi-recent transplant to the Bay Area here. I honestly wish I asked for a bigger raise, but I didn't know what I was getting myself into. I got a very respectable raise switching jobs, but between state income tax (I came from WA) and the insane living cost, I'm actually coming out behind from where I started.

I'm making a sum I would've thought to be astronomical a few years ago, but yet I find myself pinching pennies in places I never had to worry about before.

A few of my friends from back home know how much I make, and are apparently envious, but they live better than I do on one quarter my salary.

The real "tragedy" of it is that guys like me are trapped. I've often thought about going back to a lower salary and living better for it, but the problem is that where I come from interesting, challenging software jobs are as elusive as the Loch Ness Monster. It's not the pay cut, it's the loss of challenge. Woe be unto the engineer who craves fast-paced, high-impact, challenging work without typical corporate bureaucracy.

Living better on a quarter of the salary? Jesus, I needed about 50% increase moving from Santa Fe, NM to Mountain View to feel like I was on par. How cheap is it in WA?

Ah no, these friends are in Vancouver, Canada, where a 1BR in the poshest, yuppiest corner of town, in a new high-rise with a doorman, clubhouse, pool, sauna, jacuzzi, and glorious skyline view costs about $1100 a month. Considerably cheaper ($800?) if you take a roommate.

A similar apartment in SF (1BR, peaceful/yuppie corner of town, new building, lots of amenities, etc) would run in the $3500-4500 range.

Of course, most software jobs in that town would probably cause me an early death via falling off a tall building. Believe me, I've looked.

Vancouver, Canada, where a 1BR in the poshest, yuppiest corner of town, in a new high-rise with a doorman, clubhouse, pool, sauna, jacuzzi, and glorious skyline view costs about $1100 a month

Really? The cheapest 1BR I can find in Yaletown on craigslist is $1280/month -- for 397 square feet in a building constructed in 1912. Padmapper says that the median price for a 1BR in Yaletown is $1650/month.

I have never heard of a 1 bedroom in SF over $4,000. You can get a 1 bedroom with parking in the luxurious Infinity for $3,350.

I thought housing in Vancouver was very expensive. If it's really that cheap, then I'm packing my bags and moving.

> If you can swing it the sweetest deal you can get is to work remotely for a company in SV with the SV salary.

I have essentially negotiated this. I get calls from recruiters all the time from SV, offering me 'huge' raises. I'm like "well, see, that's nice, but I'm going to need at least a 70% raise from that to compensate for the cost of living adjustment". They get real quiet.

As a guy making way less than that and living quite comfortably in San Francisco proper, I'm always amazed at this sentiment.

I'll give you that you can't comfortably have a stay-at-home spouse and two kids on that salary. But if you are single, it is tons of money. If you have a spouse making similar income and even kids, it is also tons of money.

Imo your peers make a big difference in the perception.

If most of your friends/acquaintances are making, say, $70k (the median income in SF), and you're making $100k, it's pretty easy to feel well off, because your life is basically theirs, but with an extra ~$20k (after-tax) to play with. Just look at everything they're doing, and you can do the same, but a bit easier: slightly better apartment, eat out a bit more, have more of a cash cushion in case unexpected expenses arise or you want to buy something, etc.

My guess is that that isn't the peer group of most SV engineers, though, in which case perceptions can be much different, if everyone you know is making $100k+.

This is not a useful answer unless you give specific information so as to be comparable. Otherwise, perhaps you simply have a low standard of comfort.

This is how I define comfortable -- a set of criteria which I have derived from visiting and living in both very cheap and very expensive places:

* How long does it take to get to work? Do I have to drive to work? If my car breaks, could I buy/lease a late model new car (one that I expect will not have problems)?

* Do I live close to friends, so that I can see them as often as I desire, or is the distance an impeding factor?

* Can I walk to the supermarket, cafe or restaurant, or do I have to drive everywhere?

* How large is my home, in sq. ft? Do I have a yard?

* Can I vacation in a foreign country or expensive city? Will I have to couch surf or can I afford a hotel?

* Am I able to contribute to a retirement plan? Do I have money to invest with? Can I put aside enough money that I will be able to buy even a modest home in my neighborhood in a few years?

* Do I live in a city that has a vibrant cultural scene? Are there many good restaurants?

* If I lose my job, could my savings cover 12+ months of unemployment? (Or, could I leave my job and work on my own projects for 12 months?)

For me, comfort is being on the right side of all of the above questions, and it would be a stretch to do it on $100k in the SF Bay Area. On the other hand, there are many places in the US where, by the above list, I could not live comfortably no matter how much money I had: I'd rather earn $75K in SF than $180K in Kansas. Or Sacramento even.

I'll bite. A lot of the questions are "do I have enough disposable income" where the answer is yes.

Specifics:

> How long does it take to get to work? Do I have to drive to work? If my car breaks, could I buy/lease a late model new car (one that I expect will not have problems)?

~10 minutes on bike, slightly quicker in car. I guess I could buy a new car, but I've never thought that was a good move financially over getting one a few years old. (Then again, I could just rely on zipcar living here)

> Do I live close to friends

Almost anyone I know in SF is within a 20 minutes by bike or car. Most are within 10 minutes.

> Can I walk to the supermarket, cafe or restaurant,

Other than the supermarket, yes; smaller grocery stores are a block away.

> How large is my home, in sq. ft? Do I have a yard?

130 sq feet personal room, 2 roommates, substantial common space (500 sq feet maybe?), additional storage space. minimal yard. Admittedly this is where you are going to save huge. Living with roommates over a 1 bedroom can save $12,000+ a year.

>General savings

Have a positive savings rate already while making well below $100k.

Honestly, the big expenses are just house and car. As long as you don't splurge on those, you have tons of cash left.

(This is coming from the perspective of a single guy in SF. For a family of 4 consider that down in Sunnyvale, you can find 3 bedroom houses for $2,200. If that household made $200k, they would have very high amounts of disposable income.)

I don't know; this hypothetical family of 4 making $200k would have about $12k/month in take-home pay. After rent, utilities (including cell phone bills with data plans for 4), food and clothing, 2 cars (loan payments/gas/insurance/maintenance), college tuition (paying it or saving for it), orthodontics, etc., it could be near "living paycheck-to-paycheck" territory.

Can you provide a breakdown there?

I'm doubtful it is that bad, from both how high this income is compared to the median as well as personal numbers. I blow $1,650 a month, before auto/rent, with my pretty comfortable life. Even if children were at the same level of expenses (they are realistically maybe half that), family non-auto/rent is $6,600. The two cars throw in another $1000/month; housing is $2,200. That's about $9800 a month or $2,200/year in savings (18% rate)

I think you're underestimating child-related expenses. Since we're talking about both parents working full-time, just take the cost of child care: http://www.naccrra.org/randd/data/docs/CA.pdf says this California family with 2 kids could be spending over $2000/mo on this alone, depending on how young they are.

I'm not saying they won't necessarily have anything left, but $12k/mo still may not leave them much.

I agree the family is taking more of a hit when the kids are young. However, this should amortize away as child care costs drop radically once the child is in school.

I checked http://www.babycenter.com/cost-of-raising-child-calculator and they shoe cost of raising a child to be $1,525/month for 18 years for the highest income.

Is 500 square feet really considered substantial?

My first place in a college town was 900 square feet for a studio and the landlord said many people turned it down because it was too small.

My next place up was a 2 bedroom with over 4x the size.

By SF standards, it's large. A 900 square foot 1 bedroom would be absolutely huge here; a studio that large would be insane. (example: 800 sq foot luxury 1 bedroom http://sfbay.craigslist.org/sfc/apa/2814694274.html.)

I wonder what the median salary is.

Question: would it be possible for me (in Sweden) to get a gig in SV working remotely, and only occasionally, if ever, flying in?

I would be willing to work for a hell of a lot less than $100k.

I'm not the greatest coder ever, but I learn fast and understand pretty much everything I read on HN :) My written English is excellent (better than my Swedish even) so communication should never be a problem.

What do you guys think? Should I take my dream and smoke it in a crack pipe, or is there some non-negligible chance of this actually being possible?

Edit: realized that my ingrained Swedish self-deprecation didn't do me any favors. s/not the greatest coder ever/a total bad ass rockstar code ninja, bro!/ :)

> Question: would it be possible for me (in Sweden) to get a gig in SV working remotely, and only occasionally, if ever, flying in?

It's possible, but outside of contracting you'd have to expect that most companies who are prepared to outsource will want a bigger cost difference than what you can provide and/or an office with multiple people.

If you have or acquire "special" skills that are hard to get, you might be in luck.

Flying in regularly can be fun, but the distance sucks. I'm Norwegian, live in London, and spent three years regularly flying in to SV, and it took me 16 hours door to door with a direct flight from London. You'd probably need to tack on another 3 hours or so for a connecting flight most of the time...

> I would be willing to work for a hell of a lot less than $100k.

Careful. Potential currency risk. If you do, make sure your salary isn't specified in dollars or that it's adjusted up a lot to account for currency risk.

> What do you guys think? Should I take my dream and smoke it in a crack pipe, or is there some non-negligible chance of this actually being possible?

Doesn't hurt to look for opportunities. In my case I did it because I joined a startup where one founder was British and the other really love it in London and wanted an excuse to move back, but in the end the company ended up in SV due to VC's. I knew one of them from before (we'd worked together) and so got in before the decision to stay in SV was made.

Very interesting! Do tell me more about your experience :)

It was fun while it lasted, but I flew over about every 6-8 weeks, and it got exhausting long term. I'd usually effectively lose one day to travel each way + one day after I returned where I'd be totally useless.

In terms of the work, it was challenging to work remotely. We spent a lot of time on Skype, but the time difference wrecked havoc on my schedule - my coworkers in the valley got in around 5pm-6pm London time, and would usually still be in the office at midnight my time, so I ended up working in the evenings a lot, often while also working a lot during the day. If it hadn't been a startup I might've tried to keep more strictly fixed working hours with evenings some days (to account for meetings etc) and more free time during the day, but that wasn't really an option.

I managed a team, which was even trickier because whenever I flew out I'd spend 2-3 days resolving whatever drama had arisen since my last trip. My impression both from that job and others where I dealt with SV engineers is that you're far more likely to find some real primadonnas with huge egos amongst software engineers in SV than in most places in Europe. Most of the guys I worked with were really nice, though, and overall it was a great experience.

Trickiest part with the regular visits: Make sure to never, ever say the wrong thing to immigration. If traveling under the visa waiver program, you're not allowed to do normal work while in the US. You can receive instruction and participate in meetings etc., but you can't do "productive work". We had an immigration lawyer instruct me in detail on what I was and was not allowed to do and how to address this with immigrations to mitigate the risk that I might get turned away. This was because I was flying in often enough to get asked extra questions now and again, though - if you fly in a couple of times a year, there's not much scrutiny, but I had about 13-14 stamps from SFO in my passport and none from other locations at one point...

$74/hour for contractors?? That seems incredibly low, especially in contrast with the 100K+ for employees.

I'm not sure if you're saying it's less than 100K or just that you'd think contractors would make much more than regular employees, but $74 an hour works out to roughly $150K a year if they work full time hours.

Edit: sorry, clearly I know nothing about contracting.

That is not quite how contracting math works out, though. You have to charge significantly more to account for just the direct costs of your employment (such as payroll tax, half of which is salary that every employee has but is unaware of) and the benefits package. Basically, you get to pay your own fully loaded costs. $74 an hour at 40 hour weeks gets you a package similar to that enjoyed by an salaried engineer at $80k to $90k or so.

You also tend to charge more than even that calculation suggests, because you're responsible for downtime, overhead in getting new gigs between clients, credit risk, yadda yadda. The upshot is that you'd probably have a contracting rate in the low three figures. (They do, of course, go up from there.)

Contractors can't work full-time hours.

Contractors are losing work hours by searching for clients, because you never want to end up with your queue empty. So you have to go to lots of meetings and invest in marketing yourself too. And in case plenty of clients are available, just filtering through them is a chore.

Then contractors also work on multiple things at once. At least many of them do, because that way you're minimizing the risk of returning home with zero earnings for the month in progress (we are talking about contractors earning $74 per hour that can't afford to lose much). Some clients are simply going to walk away and you're going to be left without payment, so such a strategy makes sense. But working on multiple things at once means you're constantly doing context-switching.

I think it is safe to assume that contractors are working 5-6 billable hours per day and not more.

An employee with a 100k salary costs something like 200k to the employer. Contractors also expect a bit of a premium due to getting sporadic work, if they didn't get a premium they'd opt for stable work instead. In exchange for this premium you get someone you can stop paying the second you don't need them, and someone who presumably doesn't need training. A salaried employee worth 100k salary should expect somewhere around $100/hr contracting. But the average should be higher yet, because the average contracting job requires more experience than the average salaried job.

Is it really double? The employer's side of FICA adds ~$15k , whatever the state adds to the employer adds a few more thousand. Lets be extravagant and say each of these line items cost $12k/year ($1k/month):

* Office space, utilities, parking space

* Health Insurance

* Administrative Overhead

* Office Equipment

It comes out to around $168k/year. And I know almost nobody spends that much on each of those items.

Actually I look at some of these breakdowns for large corps. You're pretty much spot on with your number. 100k employee is usually a line item at around 160k. Obviously depends on the org and role but thats a very safe average.

You left out the time required to market yourself and look for new gigs, the allowance for empty space in your schedule (it's hard to manage a pipeline even in a factory where you have insane degree of control; don't expect perfect scheduling as a consultant) and a safety margin to cover the clients who don't pay thir bills.

That said, "double" is a rule of thumb. Physicist law states that 1.68 is equal to two for rule-of-thumb purposes. ;)

FWIW I have been both a contractor and a full time employee a few times in the past 5 years and from what I have learned/been told, the general rule is if you make 74k, you should ask for 74/hr to be a contractor due to higher taxes, less job security, no benefits, etc. Obviously this is a pretty sweet deal as the paychecks are bigger, but your expenses are higher and eventually the threat of a changing economy taking your job mean you need to save some extra from that.

Its a bit more complex than that. Heres a decent discussion on the breakdown...

http://discuss.fogcreek.com/joelonsoftware3/default.asp?cmd=...

(In short theres a lot of other costs and considerations that have to go into your rate as a contractor.)

74 is likely the take home rate of the contractor. I bill out at more than double that - but I don't take home $74/hour.

Its a fucked up situation for many contractors; they are the ones doing al lthe work, and are typically billed out at 3 times what they make. The employers will say "we have to cover costs like payroll and benefits" and then turn around and charge the employee many hundreds of dollars for the benefits package (mine is 1200/month to cover my whole family.)

The Bay Area has a lot of freelancers doing miscellaneous gigs for low-ish rates, so that could drive down the average. There are people charging $200/hr for web-dev, but others (especially people w/ no experience) charging more like $30-40/hr. If you want someone to hack on your Wordpress theme, or do some minor PHP customization, the going rates aren't very high.

I wonder how this number compares to startups that haven't raised more than their Series A.

It'd also be nice to see a breakdown of average salaries between engineers, designers, and biz dev. If anyone has the info, please share.

I think your question is more intended to ask about seed round - $500k-$1mm ish

Rule of thumb for first round of engineer hires is $85k as of late - they get substantial stock in return, about as much as managers hired after the A round.

Series A you're looking at closer to market wages, with obviously less stock

Why isn't there something like AirBnB for programmers? I imagine plenty of people in SF could use an extra 1k a month in exchange for letting someone sleep on their couch.

part of the reason why: Bay Area leads nation in rental price increases http://www.sfexaminer.com/local/2012/01/bay-area-leads-natio...

At a previous startup, a ceo was out drinking beers with some engineers. Now this ceo is quite a nice person, so please don't think that I think poorly of him. Somehow, salaries came up and the ceo mentioned that we were all presumably doing pretty well. Then one of my engineer coworkers mentioned he was paying $2300 or something like that in rent for a small one bedroom near Valencia and 20th, and I said my gf and I were paying $2600 for a medium one bedroom in upper haight. The ceo was utterly shocked at what rent prices were, since he'd moved to the city and bought a house nearly 30 years before. It turns out he was paying something like $1300/mo to live in a mansion in pac heights and his mortgage was almost paid off. The thing that bugged me, in retrospect, was his lack of awareness of one of the primary drivers of engineering salaries: the cost of living in sf. And the impact of the city being actively hostile to tearing down a lot of the pretty crummy housing we have and building up.

edit: not to mention, if you perhaps want to own, $500 - $600K in most of SF is not exactly living in luxury. If you're near real public transport, ie bart, it's a small one bedroom and if you resign yourself to a crappy commute or driving it's a lower end two bedroom, 700-1100 ft^2. Further, you'll pay $1.1k per million dollars of value per month in taxes, so for a $600k house you're giving the city nearly $700/mo for forever.

I've been looking at these posts that complain about the cost of living in Silicon Valley for a while, and thought that things were pretty bad. But when comparing to my home country, Norway, things don't seem very bad at all. Granted, Oslo is supposed to be the most expensive city in the world...but from all the complaining I hear from the tech crowd, you'd think the difference wouldn't be large. But Wolfram Alpha reports a 45% / 37% cost of living difference in favor of SV:

http://www.wolframalpha.com/input/?i=moving+from+Mountain+Vi...

http://www.wolframalpha.com/input/?i=moving+from+San+Fransis...

This is on the top of the fact that we pay, in total, around 50% tax.

Housing is more expensive in SV, but everything else is much cheaper than where I'm from. Are these numbers accurate? Because if they are, then, pardon me for being blunt, you guys are really whining a lot. You must be living in one of the places on Earth with the highest ratio of income to expenses. That the cost of living is higher than in the US in general doesn't really seem like an argument to me. You're pretty much swimming in money over there.

I'm Norwegian, I used to live in Oslo, now live in London and was considering moving to California.

The tax difference is much lower than Norwegians like to think (what would Norwegians do if there was no excuse for complaining about high taxes). I calculated my Norwegian tax, UK tax and what I'd pay in California including VAT / sales tax, and while Norway came up on top, on my - way above average salary - total tax came out at about 39% for Oslo, and about 34% for California, and about 36% or so in the UK, before taking into consideration things like difference in health care coverage.

There are places in the US where the tax gap compared to Norway is large, but California isn't it.

It's hard to end up paying around 50% tax in Norway even including what you pay in VAT, unless you make a huge multiple of average salaries. You could of course add in employers payroll taxes ("arbeidsgiveravgift"; but in that case, don't forget to do that for California as well), but if so, you're considering it part of your income and need to adjust gross salary up accordingly too - I see people try to add in payroll taxes to inflate the tax number, but nobody takes the payroll taxes into consideration when comparing salaries, or when negotiating them.

The marginal income tax band is capped below 50% (when you add in state income tax, federal income tax and local taxes, the marginal tax rates in some US locations is not that far away either), and unless your salary is way above average and you spend it all, even with the 25% VAT adds up to much less because most people simply don't spend that much of their salary on buying top rated goods. On top of that, deductions reduce the gap. Of course if you live in the cheapest place possible and spend all your remaining money on highly taxed goods like alcohol and cigarettes and warm your house with petroleum, then, yes, you may manage to end up paying 50% or more to the government.

That said, overall you'd probably come out better in SF on the same salary due to the cost of goods and services. But the "we pay so much tax" thing from fellow Norwegians is a pet peeve of mine, after I moved to the UK, and, surprise, didn't actually pay much less tax.

You're probably in the right ballpark with the numbers. My point wasn't to whine about getting taxed (I am very happy with the services I get for my money), rather to point out that they are a factor. The 5% tax difference you cite between California and Norway does make a difference when making a cost-of-living comparison, considering that the jobs we are looking at would have health care included.

I've always found these cost of living calculators to be enormously useless. I've used them for every city move I've made, and the results have never been close to reality.

This is particularly true for housing, since there's more to finding a place to live than the median price of a rental. The "median" apartment in SF is likely a studio in the Tenderloin (e.g., stabby stabby!). It doesn't take into account what is being rented, nor where it is, nor transportation, nor any other crucial factors. The metric "average price of a rental apartment" is pretty much as useless as can be.

Take this for example, I moved from Seattle to SF not too long ago:

http://www.wolframalpha.com/input/?i=moving+from+San+Fransis...

According to Wolfram, housing in Seattle is about half of SF. Except, if you actually shop in both markets, you will find that in Seattle you'll find a big 1BR in a nice part of town, with a doorman, elevators, probably nice shared facilities like gyms, hot tubs, BBQs, and saunas.

For 2x that in SF you'll find a 1BR in a crappy part of town, not close to mass transit, built at the turn of the century, comes with a book full of asbestos and lead-paint warnings, and forget about the gym, you probably won't even have your own damn washing machine in the flat.

So yeah, apples to oranges really. Cost of living calculators can go burn in hell.

I visit northern California between 2 and 4 times a year for work, have done for the past 4 years or so, but I live in London.

The most noticeable thing is that the lowest end of the economy seems to run on cheap Hispanic labour; food especially. Fuel and general goods are cheaper, from probable combination of lower taxes, more competition and scale from the large market.

Major roads are in surprisingly poor surface condition; back roads in the Santa Cruz mountains are frequently narrow and dangerously uneven. The whole place generally has a feel of being hastily put together in a few years; which it has, more or less, from the combination of earthquakes and its American youth.

Consider the lack of density outside of central San Francisco - how spread out everything is - and it seems clear that infrastructure investment is thinned out over the larger area.

It's a nice place to live if you like being outdoors, but if you don't have a lot of money you'll need private transport to get to a decent bit of that outdoors.

On careful consideration, I prefer London. I end up with a lower salary, a similar cost of accommodation, I'm a lot lower in the social and financial "pecking order" owing to finance industry etc., but I have a lot more choice of things to do.

Lets trade places. Seriously though SV is decent but America is not exactly the top place to be living anymore in comparison to a place like Norway despite all the 'USA, USA' chanting we do. I'd gladly pay a boatload in taxes if it would genuinely get us out of our current messes.

I don't know... Norway might do everything perfectly for all I know, but it's way too cold and wet for my tastes!

Someone downvoted you, but you're right about the climate. Cold, wet, dark and somewhat hard to make new friends. Lower salaries and status for highly-trained professionals. Otherwise good. Generally great health care, employment benefits, work-life-balance, workers' rights, justice system etc. If you can get an operative oil job, you'll make great amounts of money.

[Edit: To the GP, I'm not sure I would want to trade places. Work-life balance is very important to me, and is something that is worth quite a bit of money to me. It seems like most Americans work very long hours with few holidays, although you do seem to get paid a lot. I wouldn't want to settle down in the US, but it might be nice to try for a couple of years.]

Feel free to come on over. There's a shortage of good engineers in Norway just as there is everywhere else. You could even work for a US company, as I do. http://jobs.yahoo.no/page/work/jobopenings

Good luck getting citizenship in Norway.

It's hardly impossible. You'll need to hold down a job (which provides a work visa) for seven years, don't be convicted of a criminal offence, and attend 300 hours of tuition in the Norwegian language or have documented sufficient skills in Norwegian or Saami. Only 20% of applications are rejected, and most were rejected for failing to meet those conditions.

How hard is getting the work permit (or whatever gets you in in the first place)?

It looks like you'll have an easier time if you're in an EU country (even though Norway isn't), due to the EEE.

From an outsider point of view, USA is good, if you want to live there for a several years, save some money and return to your home country. On the other hand, Norway (or any similar "kind-of-socialist" country in Europe) is good if you want to live there permanently.

Logically, it's the other way around: rent rises because wages (i.e., ability to pay, with an implied high willingness to pay for better housing) are high. Rent rises to capture some of the surplus that is created by the high amounts of money that go around.

San Francisco has apartment rent control so new renters (e.g. young people moving to the city) must pay more to offset landlords' loss of rental income from long-time renters.

San Francisco also has an artificial housing shortage caused by enforced height-limits for new buildings.

Furthermore there's a significant amount of "affordable housing" and public projects sitting on huge multi-billion dollar lots. All that contributes to artificially high prices for everyone else.

Most of San Francisco's woes directly result from policy-makers who don't understand basic Economics.

Or who eschew basic economics to provide a place to live for the underprivileged and underserved (in the case of affordable housing).

Your conclusion is not based with facts. Most landlords in the city do not have rent-controlled properties. That is a fact you can look up in the City websites. Therefore, the argument that rent is going up to offset rent-controlled properties is fallacious. :-)

This depends on where in the city you are -- most of the housing stock in SF is pre-1979 construction, and thus IS eligible for rent control. In SoMA, there's a lot of new construction, largely either in the form of condos or big corporate rented buildings (archstone, etc.). Most of the landlords for the older buildings own a small number of units (1-4); the big new buildings might have lots of units but not a lot of individual landlords.

Most startup people seem to want to live in the Mission or other older areas, even if they work in SoMA. (something I don't understand; I like the new buildings in SoMA)

I'd chalk wanting to live in the mission or other areas to two things. Most people hate living in large apartment buildings when you can have a sweet victorian flat and the "nightlife" in soma is a totally different vibe than in the mission. Especially the variety of options.

> Most landlords in the city do not have rent-controlled properties.

But what about tenants? The San Francisco Tenants Union says, "most [San Francisco] tenants are covered by rent control." [1]

I couldn't find recent numbers, but the San Francisco Rent Board's 2002 Tenant Survey Summary Report [2] says two-thirds of survey respondents’ units were rent-controlled and 10% were market rate:

San Francisco’s rental housing stock is still dominated by rent controlled units. Over two thirds of survey respondents’ units were classified as rent controlled; 13 percent were subsidized or assisted, 10 percent were market rate and the remainder were either occupied by close relatives of the property owner or their market status was undetermined.

[1] http://www.sftu.org/rentcontrol.html

[2] http://www.sfrb.org/Modules/ShowDocument.aspx?documentid=188...

All the rent control in the world doesn't mean a thing if a newcomer to SF can't actually rent such a low-priced unit. Here you go:

http://sfbay.craigslist.org/sfc/apa/

Show me where the rent-controlled units I can get are.

They don't exist, because whatever ones are out there are either crappy enough to more-than-make up for their cheapness, or snapped up by well-connected people.

(Btw, love the URL -- at a glance it reads as stfu, lol.)

While it is possible that most landlords don't have rent-controlled properties, I think the majority of renter-occupied housing is subject to rent control. FYI almost anything built prior to 1979 is rent controlled. Also, what sf calls rent controlled is what nyc calls rent stabilized: when tenants leave the landlord can reset the unit to market rents. The law only caps increases while the same tenant lives in the same apartment.

data: proportion of renter occupied housing in sf subject to rent control: http://www.thehdmt.org/indicators/view/192 2nd map direct link: http://www.thehdmt.org/img/indicators/pdf/RentControlHousing...

Apart from the other argument made that SF has a low portion of rent-controlled properties (I don't know anything about that really), your reasoning would only work if all landlords would collude in keeping rent prices artificially high; something that is often claimed by those less informed about economics but highly improbably in reality (for a variety of reasons - there is so much literature on why large-scale collusion for price inflation of commodities is implausible that it makes little sense for me to repeat it here).

Furthermore, I think you're misunderstanding pricing strategies landlords use to set rent prices. A landlord doesn't (and can't) just say 'oh I need a 4% ROI on my capital, so I need to charge 1200$ of rent for this unit to make up for the 800$ I can charge on the other'. As a landlord, you try to capture as much of the value that consumers are willing to pay for housing as you can. There are various ways of trying that, but all involve variables that are completely separate from the rental income made from other properties (somehow the gambler's fallacy comes to mind, I think both lines of reasoning are in the same class of common cognitive mishaps).

I wonder how long this cycle will last.

SF is pretty expensive, but more of Silicon Valley (both jobs-wise and population-wise) is in the San Jose area, which is considerably more reasonable. Still not cheap, but not $2600/1-bd level; that kind of rent will get you a 2-bd house.

If Bay Area is so expensive, how people with shitty jobs (sweepers, fast food chain workers...) can afford living there?

It's housing that is the main thing that makes the bay area pricier. You can get that down by living in a shared unit.

Cause they all make 100k also - you'll laugh at this until you realize its true.

Well I suppose not everyone like fast food workers but in all seriousness there are a bunch of menial jobs in SF that pay 75 - 100k. Usually union protected gigs.

The median household income in the city is around $70k, so most of the population doesn't have a 6-figure income...

As a sibling commenter noted, it is the other way around. Constrained supply and high demand are driving the prices.

Now it is true that the one-bedroom rent increase probably is blowing away the added after-tax salary. However, if the tech worker lives with roommates (where rents hit ~$1000/month), he will take home more income in the Bay Area than elsewhere.

I make $100,000 a year and my rent is $10,000 per year, I can't imagine earning so much and spending over 1/3rd on rent out of necessity instead of choice. The new place I'm renting (starting next month) will bring my rent up to around $2,800 a month but it's a choice and an incredible place, being forced to spend so much on so little must sting a lot, especially when $100,000 year income is considered well off everywhere else. I'll be living like a king in my new place.

Sure it's by choice: the choice to live in San Francisco or the peninsula—the most exciting locus of tech innovation in the history of the world. Personally I was not crazy about it, so I took the opportunity to move to my company's London office where things are even more expensive. It's all choices though. I doubt you could name a city that I'd be willing to live in where you could get a decent apartment for $800/month.

Calling BS. The author cited Dice, which is questionable at best.

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