The problem is the compensation ceiling in these cities. It’s not the Midwest, but when I was searching in Atlanta for tech jobs to stay closer to family, the upper limit was about $150k, which I think was at Square. There are other non-tech companies that offer SWE positions (The Home Depot, Warner Media), but you will always be treated as a cost center and the career growth is limited.
Meanwhile, SWE comp at FANG can end up closer to $350k for senior engineers and $600k for staff positions. With a lot of these companies now offering permanent remote work, even a 50% pay cut is better than the local offerings.
FAANG is currently pretending that the high-pay given to high-quality Bay area engineers is due to the cost-of-living.
I think once remote work really starts in full swing, we'll see wages in remote regions rise as companies realize that they are essentially negotiating with the same people, who still expect to be paid highly for their work.
I think you'd sooner see wages fall than rise. People are working those salaries in cheap areas because they couldn't get a higher salary elsewhere, after all. There is a finite amount of these highly paid positions and far more qualified people.
> There is a finite amount of these highly paid positions and far more qualified people.
Disagree - I think that the reality is that most of those in the US who are qualified are already living on the West coast. People underestimate the entry barriers to tech because they are already good at tech.
Salaries will fall as more Gen Z (grew up with tech) enter the labor market, but I'm already seeing higher offers in LCOL areas because the tech labor market remains tight in tech right now.
The real differentiation between west coast/{"non-traditional"|LCOL} areas seems to be around non-base compensation offerings.
I've got a friend who is a remote L6 solutions architect with AWS. His compensation is decidedly west coast: ~30% annual bonus and insane RSU grants, while his base is near or below mine. Stock offerings are atypical in the companies in many of these areas, and 30% bonus is unheard of for technical people.
So while LCOL areas may have better base comp, people expecting six figures worth of stock grants aren't going to bite.
The people making the hiring decisions are providing high pay because if they don't, then the person they want to hire has the option of working elsewhere for high pay. The people accepting the high pay are able to get the high pay because they have the option of selling their labor to someone else who will give them high pay.
Price is based on supply and demand curves, and cost of living isn't directly a causal factor. If it is true that FAANG can keep printing money while hiring people willing to accept lower pay, then that will happen but it will be because the FAANG's prospective supply of labor would have increased.
Meanwhile, SWE comp at FANG can end up closer to $350k for senior engineers and $600k for staff positions. With a lot of these companies now offering permanent remote work, even a 50% pay cut is better than the local offerings.