71 US Cities Are Now Paying Tech Workers to Abandon Silicon Valley. And It's Working (livemint.com) 76
"A growing number of cities and towns all over the U.S. are handing out cash grants and other perks aimed at drawing skilled employees of faraway companies to live there and work remotely," reports the Wall Street Journal:
A handful of such programs have existed for years, but they have started gaining traction during the pandemic — and have really taken off in just the past year or so. Back in October there were at least 24 such programs in the U.S. Today there are 71, according to the Indianapolis-based company MakeMyMove, which is contracted by cities and towns to set up such programs.
Because these programs specifically target remote workers who have high wages, a disproportionate share of those who are taking advantage of them work in tech — and especially for big tech companies. Companies whose employees have participated in one remote worker incentive program in Tulsa, Oklahoma, include Adobe, Airbnb, Amazon, Apple, Dell, Facebook parent Meta Platforms, Google, IBM, Microsoft, Lyft, Netflix, Oracle and Siemens, according to a spokeswoman for the organization.
Local governments are offering people willing to move up to $12,000 in cash, along with subsidized gym memberships, free babysitting and office space....
A skeptic might ask why local economic development programs are spending funds to subsidize the lives of people who work for some of the most valuable companies in the world. On the other hand, because these remote workers aren't coming to town seeking local jobs, an argument can be made that they constitute a novel kind of stimulus program for parts of the country that have been left out of the tech boom — courtesy of big tech companies... Every remote worker these places successfully attract and retain is like gaining a fraction of a new factory or corporate office, with much less expenditure and risk, argues Mark Muro, who studies cities and labor at the Brookings Institution.
The reporter interviewed an Amazon engineer who moved to Greensburg, Indiana (population: 12,193), and Meta worker David Gora, who moved to Tulsa, Oklahoma and praises its relocation program's sense of mission, possibility, and community. "Even with the pay cuts that Meta has imposed on workers who relocate to areas with a lower cost of living, Mr. Gora is saving a lot more money and has a much higher quality of life than before, he adds."
Tulsa's program is unique in that it's funded by a philanthropic organization rather than a local economic-development budget, the article points out. But it adds that "a study conducted by the Economic Innovation Group and commissioned by Tulsa Remote concluded that for every two people the program brings to the city, one new job is created." By contrast, when an office moves to a town, every new high-wage tech job creates an estimated five more jobs in sectors including healthcare, education and service, according to research by economist Enrico Moretti. That's because those deals involve not only people but the money that goes into building and maintaining facilities, paying commercial property taxes and more.
Still, for towns that don't have the budget to attract a whole office or factory, the modest impact of bringing in a handful of remote tech workers can be balanced by the much smaller investment required to attract them.
Because these programs specifically target remote workers who have high wages, a disproportionate share of those who are taking advantage of them work in tech — and especially for big tech companies. Companies whose employees have participated in one remote worker incentive program in Tulsa, Oklahoma, include Adobe, Airbnb, Amazon, Apple, Dell, Facebook parent Meta Platforms, Google, IBM, Microsoft, Lyft, Netflix, Oracle and Siemens, according to a spokeswoman for the organization.
Local governments are offering people willing to move up to $12,000 in cash, along with subsidized gym memberships, free babysitting and office space....
A skeptic might ask why local economic development programs are spending funds to subsidize the lives of people who work for some of the most valuable companies in the world. On the other hand, because these remote workers aren't coming to town seeking local jobs, an argument can be made that they constitute a novel kind of stimulus program for parts of the country that have been left out of the tech boom — courtesy of big tech companies... Every remote worker these places successfully attract and retain is like gaining a fraction of a new factory or corporate office, with much less expenditure and risk, argues Mark Muro, who studies cities and labor at the Brookings Institution.
The reporter interviewed an Amazon engineer who moved to Greensburg, Indiana (population: 12,193), and Meta worker David Gora, who moved to Tulsa, Oklahoma and praises its relocation program's sense of mission, possibility, and community. "Even with the pay cuts that Meta has imposed on workers who relocate to areas with a lower cost of living, Mr. Gora is saving a lot more money and has a much higher quality of life than before, he adds."
Tulsa's program is unique in that it's funded by a philanthropic organization rather than a local economic-development budget, the article points out. But it adds that "a study conducted by the Economic Innovation Group and commissioned by Tulsa Remote concluded that for every two people the program brings to the city, one new job is created." By contrast, when an office moves to a town, every new high-wage tech job creates an estimated five more jobs in sectors including healthcare, education and service, according to research by economist Enrico Moretti. That's because those deals involve not only people but the money that goes into building and maintaining facilities, paying commercial property taxes and more.
Still, for towns that don't have the budget to attract a whole office or factory, the modest impact of bringing in a handful of remote tech workers can be balanced by the much smaller investment required to attract them.
Not worth it (Score:4, Interesting)
Anyone desperate enough to apply and then move to a particular place in return for a $1000 benefit and payment package probably isn't what these groups were hoping for. Anyone who is actually qualified (i.e. not lying on their application) was probably going to move there anyway.
Re: Not worth it (Score:4, Insightful)
Cities have offered similar programs to employers that move companies into their city, this is nothing new, except for the scale (individuals vs dozens, hundreds or thousands of new or relocated jobs), and cost (not dealing with millions of dollars over a decade or more).
It obviously benefits the cities in the long run, but compared to corporate relocation packages, individual remote workers face challenges to relocate as soon as the program stops benefiting them, as opposed to, say, a manufacturer or other large employer.
If all a worker needs is a safe place to live and a reliable high-speed internet connection, sure you can lure them with special offers, but what keeps them when another city offers a better deal?
Re: Not worth it (Score:2)
"...individual remote workers face few challenges to relocate as soon as the program stops benefiting them..."
Re: Not worth it (Score:5, Insightful)
You have to grab people in their mid-to-late 20s and hope to hell they have children before the grass starts looking greener somewhere else.
Most people with kids are 'established' and aren't keen to pull up stakes and move, disrupting their childrens' schooling and social networks.
So I'd say, decent incentive PLUS have a great environment for raising kids. That'll be the long term best bet and holding on to people. You're never going to hold on to the true 'digital nomad' who might decide Costa Rica could be fun for a couple of years.
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That requires some of these places to be good places to raise kids. That's not something you can just up and do in a couple years - it already needs to exist. Some places are going to check that box but if you're not already there, I think the money will quickly be lost once the kids are school age.
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Re:Not worth it (Score:5, Insightful)
People are creatures of inertia, and advertising these benefits is a way to draw attention to particular cities. Suppose someone lives in Silicon Valley and decides to relocate because they can work remotely. Where will they look first? Places where they have family or friends or some good memory or impression. They might not realize that these places offer some of the same benefits that they know of in other places.
Companies get huge benefits for bringing their business to places -- usually in the form of credits against future taxes, sometimes in more direct subsidies -- so often that it's nice to see the idea applied to individuals as well.
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i'm often surprised at how cheaply otherwise-rational people can be bought out.
and if we're doing cynically speculative folk psychology: note that aptitude isn't the only thing someone can bring to a corporation. i'd imagine there is also value in a spineless yes-man willing to uproot his life for dog treats, even if they're not the best at whatever their job title is.
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It's also my home town so I find it hilarious they might offer me money to relocate to where I'd end up retiring anyway...haha
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"Free entry to a beach?" What nonsense is this? Here (Charleston, SC), if you want to go to the beach, you just go to the beach. Stay as long as you want, then go home.
Re: Not worth it (Score:2)
tbh it isn't a whole lot either unless you have other reasons to go there anyway, in which case, sure, a free $19k never hurt anyone lol.
the problem is they can't really offer rationally-sized incentives without legalized indentured servitude, which the liberal nanny state is "protecting" its subjects from.
Re: Not worth it (Score:2)
Re: Not worth it (Score:2)
i, and any rational person, would prefer a diesel generator and slaves to the false security of liberal institutionalism.
texas is not a counterexample because uh texas lol.
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Farmington NM is offering $191 (that's right, I didn't miss a decimal point), most of which is one-time coupons for a month in a gym, or free entry to a beach. I don't think that should count. (A reply just before me says Rochester NY is offering 100x that much. That might be a starter.)
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If someone is actually reasonably well off and free to move anywhere they like they're better off choosing the place that best suits them, and with the lowest cost of living. These cities which can afford the financial incentives will also have a cost of living high enough to negate the entire offer in a couple of years. And then you have the extensive application process. Anyone desperate enough to apply and then move to a particular place in return for a $1000 benefit and payment package probably isn't what these groups were hoping for. Anyone who is actually qualified (i.e. not lying on their application) was probably going to move there anyway.
I disagree slightly, in that while the amount itself shouldn't matter that much, it's about gaining visibility - both to the idea and the place.
Great value (Score:2)
We've heard stories where a local government creates a new industrial park for 20 million$ and 20 employees move into town. Even if the downstream effect increases that to 120 people, it's still 1/6 million$ per resident. So less than 1/80 million$ (eg. "$12,000") is great marketing.
Re: Great value (Score:3, Informative)
Build an office park? Maybe, more commonly they build out infrastructure to a remote part of town and offer discounts on income and property taxes.
While a city may go without collecting property taxes for a set period, they still collect worker income taxes, sales taxes on items workers purchase, increased property values lead to greater property tax revenues, and so on.
By offering a small incentive to the employer, they increase their total tax revenue, and their investment in infrastructure will remain if
Re: Great value (Score:5, Informative)
While a city may go without collecting property taxes for a set period, they still collect worker income taxes, sales taxes on items workers purchase, increased property values lead to greater property tax revenues, and so on.
False. In very few cases does this situation happen, and especially less so now that people are working from home. Multiple [heartland.org] studies [bloomberg.com] have shown [newrepublic.com] giving tax breaks to companies does not produce [cbsnews.com] either the number of jobs claimed [salon.com], or bring in additional revenue to offset the cost of the tax breaks or subsidies. In many cases, cities never even get their money back.
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The article is about entirely avoiding that problem by simply bringing in the workers. Above average income workers that will be paying significant taxes.
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I haven't, can you point to one of these stories? (Not one where the office park was built just before covid.)
Low-key despicable. (Score:5, Interesting)
It's a common and tragic mentality in many parts of the country. On the state level, those governments would rather spend 10 million trying to attract a business from out of state than spend 1 million building up the ones they already have. The results speak for themselves: Every state that adopted that kind of strategy decades ago is still dependent on it, with little net gain, while the ones who built from within became significantly competitive.
Not as bad as all that. (Score:4, Insightful)
I don't think your math works out. The incentives are, what, on the order of $10k? Can you give a local a college degree for that?
Besides, now you have a teleworking importee who thus brings external money (expenses, taxes) into the local economy.
It's not about helplessness. It's about expanding the economy. Or if you like about giving inspiration by example. It's not that the locals could not, it's just that they're not used to thinking they can. Now there's someone to show them.
This way is actually better than giving out scholarships to locals to try and emulate something far away. Now they have a local example and if they put their own money toward following the example it's actually worth more to them. But you can still make sure the required education is affordable without stupid debts, of course. That's always a good idea.
Re: Low-key despicable. (Score:3)
You act as if college loans, scholarships, etc. don't already exist.
If you want to improve a community you improve the public education system, and an educated workforce will attract employers, which will bring in workers who need housing, food, other services. That is how you grow your local economy.
If you can't improve the local workforce - can't improve local schools - then you have to bribe/incentivize employers, either at the macro or micro level.
How is this any different than a city investing in high-
Re: Low-key despicable. (Score:3, Interesting)
If every higher income they attract produces five new jobs
Bullshit. How many $30,000/yr ($15/hr) jobs can a $125K/yr "create"?
A rich household creates a handful of fractional jobs, maybe. Someone cuts the grass, that's two hours/week, tops, so that's 1/20th of a job, maybe. A house cleaner? Call it four hours every two weeks, that's another 1/30th of a job. So they put in a pool? Great, the pool boy comes by for an hour a week, 6 months out of the year, and in the off season shovels snow, again, for an hour/week - that's 1/40th of a job... How the hell do you get
Geometric progression - makes sense (Score:2)
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Bullshit.
A significant portion of the money you spend goes for raw materials, not salaries.
How much of your $100K in after tax wages go towards mortgage payments/rent? Car payments? When you drop $5 at Starbucks, only a tiny percentage of that goes towards salaries/jobs, the majority goes for coffe beans, disposable cups, and rent for the store front
You elaborate fraction festival aside, your mortgage/rent payment, likely the biggest line item in your annual budget, does not create a single job - you likely
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The local government takes 1/12th of my money, the other levels 1/3.
Don't forget sales taxes, if you are in the Bay Area, that's another 1/12 of every dollar you spend outside the grocery store after income taxes.
However if we assume those local jobs pay 1/3rd of my job and thus each person spends 3/4ths locally that only creates 4 new jobs at 1/3rd my job. In fact if I have a good google job that pays over 200k
If you make $200K, and local jobs pay 1/3rd of your job (or $66K), how do you get to 2.5 jobs directly created, let alone extrapolate to 7.5 jobs? 2.5 times $66K is $165K, but you only spend $100K, after $100K in taxes.
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You've got the cart before the horse, I think. Government spending is downstream of the economy, it's on the expense side of the ledger. In this case, government spending to add a job just means it will be subtracting the money that could have funded another job. Government never increases wealth, it is a middleman who redirects wealth while taking a fee off the top (and usually a very hefty one, at that.)
The government can reduce the negative impacts of its spending by choosing to spend on assets that will
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Government spending is downstream of the economy
The ocean is downstream of your toilet, but would you claim the ocean only exists because you piss?
Government never increases wealth
There isn't even a definable concept of wealth without government, and the distinction with the "private" and "public" economy is likewise arbitrary and meaningless. If government even defends my property with a functioning court system, they are playing a role in its creation. And if I alone defend my property, then I'm acting in a government capacity and the same principle holds true.
The government can reduce the negative impacts of its spending by choosing to spend on assets that will appreciate in value.
There's literally n
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Many of their residents are rustic, uneducated and too set in their culture to change. Residents often ARE helpless, incompetent peasants who can only build their own economy if some knights-in-shining-armor move there and do it for them. Workforce education in hickshit towns is a battle. Local primary education is typically weak, local culture savagely ignorant (perfectly nice people can be dumb as a brick and hostile to learning), and as a result few grow up mentally equipped to suit technical work.
I quit
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Apple, Moretti says, employs 13,000 directly in Cupertino but has spurred 70,000 indirect jobs in the region.
I don't think the ratio of direct to indirect jobs created by having the corporate headquarters of one of the richest companies in the world is a good way to gauge the result of moving a field office to a small city in the midwest.
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trying to attract a business from out of state
You realize that's not what's happening here right? this is attracting remote job workers. Who pay income and property taxes as well as spend above average income in the local economy.
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Re: Low-key despicable. (Score:2)
OC they're forgoing tax income. (Score:2)
Except the logic fails on every level, because building up your existing residents attracts new ones too just as a bonus.
Feudal thinking should be pitied. It should not be enabled. People who are far beyond the economic status of the community they move to are not helpers, they just
Re: OC they're forgoing tax income. (Score:2)
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Let's assume smart people are smart and won't uproot themselves and their families without a strong argument. This implies that smart people from outside must inherently require a bigger investment to relocate than smart people from inside, since people from inside aren't being asked to go anywhere. In this common s
Probably. Why don't you try it? (Score:2)
EOM
Re: Auction (Score:2)
So Craigslist?
A big business in a small town is the best of both (Score:4, Insightful)
At one point in my career, I had to do site visits of every town in the US with a population of 50K or higher in which my Big 8 accounting firm had an office. When we'd visit a large town such as Detroit, they'd put us up in the soulless (but still expensive) downtown hotel and we'd work in the office cube farm with the broken-down metal desks and ugly orange cube dividers that nobody else was using. Then we'd drive 45 minutes west to a small town like Ann Arbor where we were the Big Employer in town, and it was rooms at the nicest bed and breakfast in town, lunch at the country club every day, and offices with walnut-covered interiors and bay windows.
You want a nice life in America, work for a big company and live in a small to medium-sized town.
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The problem with a big business in a small town is that at some point if the business growing it will consume all available labor so it will have to move. In your case it is a business where you want to have separate offices in separate cites, but for manufacturing is is often more efficient to build a larger facility somewhere else and move the whole operation. Now the small town has gone quickly from a tight labor market to a very slack labor market.
"Only essential personnel... (Score:2)
given how badly the red states treat people (Score:1, Insightful)
I'd rather move to some other country than move to a red state in the US.
the cost of living in the bay area is very high, but we have a much better and kinder government here and we're proud of the fact that people leave saying its not 'business friendly'. this is a built-in filter and the idiots who dont belong here are welcome to leave! encouraged, in fact.
just compare the treatment of the people by their local govs and see how bad things have gotton just over the last few years.
you could not pay me to
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Yes, do us both a favor. (signed) The Red States.
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we have a deal.
you stay in your business-friendly shithole and we'll stay here where masks are still being worn and where companies are not forcing you to return to the office. the balance here is quite reasonable.
you'll suffer, though, as the blue states provide the actual spending money that the red states USE to survive.
read up on it (if you CAN read).
enjoy your jesus land where forced births to 10 year olds are going to be the norm.
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Call them what they are (Score:2, Insightful)
Christian Taliban states. Every day the two groups are getting closer in their beliefs.
Getting rid of the separation of church and state? Check. https://people.com/politics/re... [people.com]
Against same sex marriage? Check. Well actually this one made me giggle. https://www.businessinsider.co... [businessinsider.com]
Allowing Christian prayer in schools? Check. https://newhampshirebulletin.c... [newhampshirebulletin.com]
Abortion speaks for itself.
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Yep. I live in Canada but work remotely for a US-based company. No way in hell would I relocate to the US. What with the current makeup of your Supreme Court and the complete broken-ness of your system of government, you'd all better enjoy what rights you have while you still can.
Feel free to cue up your "Canada is Socialist!!!" knee-jerk comments, but please read the rankings [freedomhouse.org].
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Why should I give up my job for a US citizen? What's in it for me? Isn't what's in it for me the canonical US ethos?
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Also, to be clear, I do not hate the US. I just think it has gone off the rails. The US used to be a beacon of freedom and democracy, but that is simply no longer the case and it's tragic to see how much it has changed.
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Any time! I actually used to own a software company in Canada; most of our clients were in the US, so I used to do this on a much grander scale. :)
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Curious, does your employer-provided medical insurance cover medical care in Canada? Or do you get your medical care/ insurance some other way?
I'd love to retire in another country, although I'd probably choose a European one if everything else were equal. Unfortunately, it's not, and medical insurance is the sticking point. Although I'd love to find out I was wrong.
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I'm a contractor, not an employee, so have no benefits from my US client. Health care in Canada is free; we have universal single-payer health care for most things. For the few things that aren't covered, it's more cost-effective for me to pay out of pocket than to buy medical insurance because the medical industry here does not screw consumers to the extent it does in the United States.
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I would love to see someone from, oh, say The Satanic Temple, lead students in prayer.
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That would probably get them hurt or worse by the followers of the Prince of Peace.
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Have someone unroll a prayer mat on the 50 yard line and face Mecca.
No I didn't mean that kind of prayer!
Or... (Score:1)
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I grew up in a Chicago suburb in Illinois, not far from your Indianapolis. After college, I've lived lots of other places, including South America. Nothing would induce me to move back to Illinois, it's so boring. So what keeps you in Indianapolis?
A few years later: (Score:1)
"WTF, we filled our city with gaddam nerds!"
It's all fine until . . . (Score:2)
It's all fine until some of those flyover places ban birth control and prevent their women from crossing state lines. Maybe those cities should advertise as incel safe spaces. Does the Constitution guarantee the right to travel? Nope! Their women have so little choice!