As tech giants introduce new work from home guidelines, employees are considering moving away from Silicon Valley and companies contemplate adjusting salaries
wait for it — actually enjoy living in the Bay Area, which, spoiler, is a nice place to live! https://twitter.com/... Josh / @joshuaogundu : The funny thing is people assuming that their employer won't adjust their salary based on COL https://twitter.com/... Benedict Evans / @benedictevans : @davidu How many people were paying $5k a month for a two bed apartment in 2000? Alyson Shontell / @ajs : I really think this time you're going to see a mass exodus from cities. Now that people are no longer bound to a physical office they can pursue both a high paying career and high quality of life. Millennials are already strapped for cash, and this will be very appealing for many https://twitter.com/... Daniel Tunkelang / @dtunkelang : People have been predicting an exodus from Silicon Valley for years. Will this time be different? And will housing prices and salaries plunge accordingly? https://www.bloomberg.com/... Josh Eidelson / @josheidelson : “It's probably not great business practice to pay Bay Area comps in Michigan,” Twilio chief people officer says https://www.bloomberg.com/... @sarahfrier @BW Carl Franzen / @carlfranzen : “It makes no sense paying Bay Area rent if we can earn our salary living elsewhere,” says Dhar, 25, who already works remotely for a New York advertising startup. They're considering moving to Hawaii—or, to really save money, somewhere in the rural U.S. https://twitter.com/... Mike McGrail / @mike_mcgrail : Interesting look at how the pandemic may effect Silicon Valley tech firms' approach to offices. So many of them have made their bases such a key part of their culture. https://www.bloomberg.com/... Katerina Ang / @katerinareports : “The average call center manager in Houston, probably has a higher material quality of life than does a director level executive in Boston or certainly in San Francisco” https://www.buzzfeednews.com/ ...
Context & Ripple Effects
This May 2020 story is the opening move in the remote-compensation arc: with [[a:953934|Zuckerberg confirming a week later that relocated remote workers will see pay adjusted to their new location]] and Facebook targeting roughly half its staff working remotely long term (his own framing), location-based salaries went from water-cooler speculation to explicit policy at the largest employers.
Twilio's chief people officer supplies the logic in the relationships — paying Bay Area rates to someone in Michigan is 'probably not appropriate' — and the exodus was real enough that by January 2021 the New York Times had interviewed more than two dozen tech execs and workers who had left San Francisco. The question this article poses is whether the arbitrage survives the return-to-office.
First-order effects
- Employees contemplating a move out of Silicon Valley now face an explicit trade-off: cheaper housing, but compensation re-benchmarked to local cost of living rather than Bay Area scales.
- Twilio's stated position makes location-adjusted pay a live policy debate inside every company drafting work-from-home guidelines, not just a Twitter argument between Benedict Evans and Josh.
Second-order effects
- Facebook's move to formalize location-based comp sets the template rivals must match or explicitly reject — any employer keeping flat national pay bands now competes for talent against firms offering relocation without the salary haircut.
- Bay Area landlords, services, and tax bases lose pricing power if high earners decamp, while destination markets (Michigan, Houston, Boston appear among the destinations under discussion) gain a remote-earning professional class without local employers paying for it.
Third-order effects
- If the pattern holds, 'San Francisco salary' detaches from San Francisco residence, compressing the premium that made Silicon Valley the default talent magnet — though the 2021-2022 follow-on coverage shows the counterforce: workers trickling back as Twitter reopens its SF HQ and Google expands there, even as companies keep spending billions on office space they officially no longer require.
The trend: Remote-work policies are unbundling tech compensation from geography, but the partial return to offices is turning location-based pay into a negotiated hybrid rather than a clean arbitrage.