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The Almighty Buck

The Price Of Doing Business 797

Posted by michael
from the they're-not-even-a-real-country-anyway dept.
8127972 writes: "It seems that a ton of high tech companies are leaving cities (like San Fran) with high costs of doing business for cheaper cities (Washington DC is mentioned due to new government spending) or even cities in Canada. Sounds like American high tech workers are going to have to learn to say the word "eh?" a lot."
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The Price Of Doing Business

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  • Move to Oklahoma!!! (Score:5, Interesting)

    by TurboRoot (249163) on Friday March 01, 2002 @03:40PM (#3092992)
    The cost of living here is SUPER low.. plus.. you can hire VBscript monkies to work on ASP sites for $8/hour.

    In Oklahoma, you put an add in the paper, and you will have billions of applications and you can pick who ever is willing to take the least amount of pay.

    That is why companies like AOL like to put call centers in Oklahoma cause they can pay a whole $9/hour and people shit themselves about how much money it is. :)

    Unfortuantly, actually SELLING a product in Oklahoma is kind of bleak.. but if your product is nation wide.. then this is the place.

    • by Amarok.Org (514102) on Friday March 01, 2002 @03:45PM (#3093057)
      I used to work for a company who did just that... transfered me from San Jose to OKC to work in a call center. That company (and it's call center) is still there. They've systematically eliminated most of the original CA transplants (and their associated CA salaries) after getting local "monkies" (as you call them) trained to do the work at less than half the cost.

      Oklahoma (and similar states) also tend to offer HUGE tax incentives to companies like AOL to open call centers, since it creates lots of jobs for the local populous that would not have otherwise exist.

      Luckily, I escaped the hell that is Oklahoma, and am now living in the hell that is Texas. *grin*

      • by TurboRoot (249163)
        Haha, I so know what you are talking about. Most of my friends, family, and ex-girlfriends have all escaped to Texas!

        The few of us left here in Oklahoma, we refer to ourselves as "refuges", are too lazy to get off our asses and actually move to a state where we can get paid well.

        But! the advantage is, I don't really have to work hard and get a ton of free time. Plus, my true love besides computers is cars (hence my nick of TurboRoot). In Oklahoma, we have no vehicle inspections anymore. That means you can take all that emission crap off your car (all the polution blows northwest and ends up in Denver) and you can't get in trouble. The only restriction is that your car isn't too loud. Other then that, modify your vehicle at will.

        Of course, don't forget the joke "Why is Oklahoma so windy? Because Kansas blows and Texas sucks."
    • by yomahz (35486)
      The cost of living here is SUPER low..

      As someone who spent the first 21 years of his life there (OKC), I can tell you that there is a reason for that. I think anyone would be crazy to move there seeing that all I ever wanted to do was get out.
  • I hear there is some cheap real estate in Kabul...
  • by Mr Fodder (93517) on Friday March 01, 2002 @03:41PM (#3093011)
    We Canadian's could end all our sentences with "Dontcha know!".

    =)
  • First off, Canadian's don't say 'eh', well not much anyway... Second, the dollar is worth a lot more over here than in the states. There are a lot of technology companies in the states paying nearly twice as much in salary for US workers, than what they need to pay their Canadian counterparts, for equal, if not better productivity and performance. But with the same logic, the Australian dollar is even cheaper than the Canadian dollar... So should all high tech workers learn Australian slang? I think not.
    • "Canadian's don't say 'eh', well not much anyway"


      Depends on the area.. My brother owns a place in La Conception (about 50mins north-west of Montreal) and almost everybody up there says eh, A LOT!

    • Re:Sure, whatever. (Score:2, Informative)

      by Succa (108618)
      Most people overlook Canada when it comes to being a tech "hotbed", but there are lots of great companies up here. Ottawa (Corel, Alcatel, Nortel [!]), Waterloo (RIM, Open Text), Burnaby BC (Electronic Arts), Toronto (guh...I dunno), and Montreal (Softimage, Discreet, Zero Knowledge) are the cities I'd be choosing to set up shop. Ottawa in particular has a wealth of (struggling) tech companies over in the west end, as well as the Ottawa Linux Symposium. Canada: not just for doughnuts anymore!
    • Actually, you *do* say "eh". You just don't notice it when you do, eh?
      -russ
    • Re:Sure, whatever. (Score:2, Insightful)

      by csbruce (39509)
      There are a lot of technology companies in the states paying nearly twice as much in salary for US workers

      Canadians are extremely competitive internationally. Americans are simply over-paid; that is why America is an importer nation, because American-made products are also over-priced internationally.
    • food for thought (Score:2, Informative)

      by eracerblue (473104)

      i like the "even Canada" statement. said as if it were completely outrageous. "even timbucktwo..."

      perhaps the weak Canadian dollar and the dual Canadian olympic hockey golds will be joined with a monumentous reverse brain drain. Canada's been complaining about it for years... maybe the US will get a kick at the can.

      and i see the "baren glacier as soon as you hit the border" misconception is still alive and well. Vancouver, Calgary, Toronto, Ottawa, Montreal, and others are massive metropolatin centers with similar climate to many US cities. in Vancouver it rarely freezes and typically has winter temperatures in the mid-high 40's. (that's around 8degC... eh?)

  • Amazing. (Score:4, Insightful)

    by BigZaphod (12942) on Friday March 01, 2002 @03:43PM (#3093028) Homepage
    I find it amazing that they are moving out of large US cities into Canda instead of just moving to the midwest or something. Chicago is quite a lot cheaper than the coastal cities, and it has all the usual big-city perks.

    Of course there are also a lot of small citys that would kill for some high-tech company to move in. Seems like they could get some pretty good deals if they used that option.

    Why do so many companies feel the need to be tied to a coast?
    • Why do so many companies feel the need to be tied to a coast?

      Because the concentrations of population and other companies are on the coasts. Chicken, meet Egg.
    • Re:Amazing. (Score:3, Interesting)

      by buckeyeguy (525140)
      The article doesn't say that a bunch of companies are moving to Canada, only that the cost benefits might be there.

      As for the coasts vs. the world, I think it's more of a media bias, reflected in the graph shown in the article, where almost all the cities mentioned are on or near the East or West coasts. Plus, not *all* of a company has to move; example: Boeing moving their headquarters to Chicago while manufacturing stays in Washington State.

      I *should* stay out of that whole Oklahoma thread at the top, but it calls to mind what college football star (and failed actor) Brian Bosworth once said, that Big 12 towns like Norman, Oklahoma and Lincoln, Nebraska were akin to the worst of what the Soviet Union had to offer.

  • other related news (Score:5, Insightful)

    by lemonhed (412041) on Friday March 01, 2002 @03:43PM (#3093033) Journal
    There has been alot of commentary on this subject. The Gartner group put out this commentary [com.com] about the "Tech Wreck" coming to the SF Bay area.

    They claim that a city will do well if they install a broadband communications network that connects citizens, local businesses and the global marketplace.

    I think that the obvious solution to this may be Telecomutting See this link for more info [gartner.com]
    • by plopez (54068) on Friday March 01, 2002 @04:20PM (#3093430) Journal
      I think you hit the nail on the head with telecomuting. As long as 3 years ago I heard aobut companies looking for places other than Atlanta simply due to poor transportaion with a lack of mass transit. More companies are getting sauvey (sp?) to the fact that 2+ hour commutes to and from work have HUGE hidden costs. As far as cities selling themselves as a good place for businesses, transportation or telecommuting is going to become more and more important.
  • The Bay Area economy has always been like this. Anyone who has been here for more then 10 years will realise that the entire thing is cyclical. Years of boom, then years of bust.

    If you stick around long enough, you'll even see it yourself. Eventually, the next big thing(tm) will make its way back to the Bay Area and everyone will re-locate here again.
    • You can see the swell of the next boom industry - biotech, take hold in the Bay Area (and Boston).

      The Bay Area is an expensive market for expensive talent in expensive industries.

      No, you should not manufacture widgets in the Bay Area if you can do so elsewhere. The companies that are here are here becuase they need a high concentration of talent across a set of tech industries that you cannot find elsewhere in quantity.

      R&D is expensive and the Bay Area is the R&D shop for the nation (if not the world).

  • by Cirrocco (466158) on Friday March 01, 2002 @03:45PM (#3093058) Homepage
    San Francisco landlords threw out long-term tenants in favor of tenants who could only afford rent for the short-term. Bad strategy. Now that dot-coms have gone to the away place San Francisco is now full of empty building and landlords begging tenants to come back. They aren't lowering the cost of rent, though. They expect that people will continue to pay the outrageous rents that the dot-coms paid. Survey says? BZZZZZT!! Oh, I'm sorry! It looks like you'll have to forgo the new Mercedes this year, Mr. Landlord.

    Bad karma revisits landlords who threw out poor people for those who could handle higher rents! News at 11!

  • by austad (22163) on Friday March 01, 2002 @03:46PM (#3093062) Homepage
    I heard that tech companies are planning on moving to North Dakota. Of course, only after the state gets electricity, and Telco. And they'll still have to convince residents not to run them out with pitchforks and torches while yelling charges of witchery.

    Then there's that little issue of finding the road during the winter since the ditches fill with snow and are level with the highway. Wow, I can't believe I actually lived there for over a year and made it out alive. The newest computer that I saw in that state was my apple IIe, which was 13 years old at the time. The only other computer I saw was at a bank, and made in the early 70's.
    • by DarND (410664) on Friday March 01, 2002 @04:49PM (#3093698)
      Don't let go of that attitude and make sure to tell all your friends about how bad it was in ND.
      Make sure you mention the horrible things like wide open plains, warm summers, clean air, stable jobs, low crime rate, friendly people and low cost of living. Qwest provides service including DSL for the Fargo area. If you don't like DSL, go with a cable modem because yes we have those too. Fargo also has wireless access from Monet. Dickinson and the surrounding towns have Consolidated Communications which provides DSL and cable modems as well. I'm not exactly sure where you were, but the things you're describing are a complete opposite of what I've experienced.

      Now after saying that... Stay out cause we don't want no strangers round these parts! Ma fetch me mah shotgun!
  • Well, having lived around the Bay Area for the last 5 years, it's no surprise. Evictions were as outrageous as rent increases, making space for tech company offices and then screwing their employees through rent.

    The median cost of rent where I live is the highest in the country. It's a nice place, but I could be buying a house in Ohio every five years, it's that bad. Firemen, police, teachers, gardeners, and others with lower incomes have been leaving the area and are very hard to recruit. The irony is, where tech industries fled to, early on, have become a similar problem. Austin, TX is a great example, seeing insanely rapid growth and the problems it brought, Sacramento, CA went the same route in the mid 80's. However, if you're looking for a decent place out of SF, Sacto isn't a bad place to go. Lots of office space and lower cost of living.

    Canada? Wouldn't the taxes alone make that less appealing? When I think it's expensive in California, all I have to do is remember the GST and PST I paid in Ontario. Gads. Probably lots of available land, but so has most of the midwest.

    • by Tackhead (54550) on Friday March 01, 2002 @04:23PM (#3093466)
      > Canada? Wouldn't the taxes alone make that less appealing? When I think it's expensive in California, all I have to do is remember the GST and PST I paid in Ontario. Gads. Probably lots of available land, but so has most of the midwest.

      According to Ernst & Young Canada Tax Calculator [ey.com], marginal rates in most provinces top out at around 40-50%.

      If you're in CA (California) and making $US 75K, you're paying a marginal federal rate of 27%, plus 9.3% state taxes (on everything over $30000), plus 6.3% for the SS pyramid scheme (up to $86000 and increasing by 5% per year), plus another 1.5% for medicare taxes. Works out to a marginal rate of about 45%.

      If you're in .ca (Canada) and making $CAD 75K, you've stopped paying into CPP (the Canadian version of the SS pyramid scheme) and EI (unemployment insurance) after C$35K or so. The marginal rates aren't really any different.

      Of course, a $CAD is worth about $0.63 US, so your C$80K is only $50K. But the cost of living is much lower.

      Got investments? Canada taxes capital gains at only half the marginal rates, and has no long-term vs. short-term rate difference. (In the US, you have to hold it for a year to qualify for the 20% "long-term" federal rate, and in CA, you're still paying that 9.3% CA income tax on it. So your long-term capital gains in California are taxed at 29.3%, and your short-term trades are at 40%. In Canada, all trades are taxed at about 20%.)

      GST/PST? OK, compare 15% vs. 8.25%. But how much do you spend, vs. how much do you save? The better-off you are, the less a consumption tax hits you.

      And if you have kids, what do you get for your money? In the US, you pretty much need a private school and university education costs are about double. And you have to pay for your own medical insurance. In Canada, the health care for Bad Stuff (cancer, etc) sucks ass, but for 90% of the population that only has to deal with colds, flu, and the occasional broken bone, it seems pretty good.

      Bottom line - The US may be tax-competitive for an individual, but California sure as fuck ain't.

      • Don't underestimate the feeling of abuse you will suffer when you pay the combined GST/PST on most anything you purchase. The above author writes it off, but it really is a bitch. Remember you get this tax on big ticket items as well, and that is where it gets really painful.

        Yes, California is the most expensive state to live in, but moving to Canada is hardly an improvement. You are better off moving to a low-tax/no-tax state.

    • There's still a long, long way to go before house prices are reasonable here. I haven't noticed purchase or rental prices falling much. "Charming shithole: $650,000." In "Noe Valley" of course which means "Bayview" if a realtor says it. The landlords are still kidding themselves, but once residential vacancy gets up around 10%, things will start to crumble. Look at the massive investments in buildings like the "Paramount" at Mission and Third: more than 500 units, almost all empty, with stupid asking prices for an ugly building in a boring neighborhood. That's still the mindset of the landlords around here. Ugh.
  • Anyone who's ever been to / lived in San Fran. or San Jose and seen the insane suburban population density there knows that those cities have some major disadvantages despite the wonderful weather. Some people like it, but for many, it's just not their style. Also the cost of living there is downright ridiculous compared to say.. the mid-west or north-east US.
  • What th--?! (Score:4, Interesting)

    by daeley (126313) on Friday March 01, 2002 @03:50PM (#3093109) Homepage
    from the they're-not-even-a-real-country-anyway dept.

    What is this? Editor-troll-and-flamebait day?

    In any case, the movie industry here in sunny SoCal has had this problem for a long time, which is why a lot of productions have been moving up to non-sunny Canada.
    • Re:What th--?! (Score:3, Informative)

      by dhamsaic (410174)
      It's from the movie South Park: Bigger, Longer and Uncut. More specifically, it's from the song "Blame Canada", which, as the title implies, blames Canada for the problems of the world. It is said between song lines by one of the bystanders in the movie.
      • Re:What th--?! (Score:3, Interesting)

        by Glytch (4881)
        And even more specifically, it's a phrase spouted by a seperatist politician in Quebec, shortly before the South Park movie was finished. I think Matt and Trey did careful research.
    • It's a SouthPark reference.

      -Peter
  • Rural IT Options (Score:2, Insightful)

    by Nameis (556253)
    It will be interesting to see if some IT companies will move from the urban meatspace to the more rural areas of the US. The office space is *much* cheaper and it provides a safer environment, especially post 9/11.

    Shameless Plug: rural communities with bandwidth can be found. Two I work in can be found at:

    http://www.bowmannd.com

    http://www.hettingernd.com

    • Shameless Plug: rural communities with bandwidth can be found. Two I work in can be found at: http://www.bowmannd.com

      Checking the weather in balmy Bowman, ND, I find a temperature of 8 degrees F, with a wind chill of -4 degrees F.

      You can call me a wimp if you want, but I don't really like freezing my ass off, even if office space goes for $1/sq ft and I get a free DS3 to my house.

  • by Chanc_Gorkon (94133) <gorkon AT gmail DOT com> on Friday March 01, 2002 @03:51PM (#3093125)
    Columbus, where I live, is a great place for this. We have a decent bus system, lots of shopping places, and lot's of office space. There are alot of call centers here and lots of 18-20 year old's because of Ohio State, Franklin University, DeVry, Keller Graduate School, Capital, Otterbien and Mount Vernon Nazerene College are here also. Columbus is also one of Ohio's most wired cities with a decent penetration of broadband (available almost city wide I believe.). Rent's for workers can range from cheap to exhorbitant. You can, if you can afford it, even buy a condo downtown in Miranova (starting aroun $300,000). Miranova is for that executive who doesn't like to put a lot of miles on thier Beamer (right downtown). In any case, Ohio in general is a good place for high tech (at least that's my feeling anyway!).
  • Interesting (Score:3, Interesting)

    by quantaman (517394) on Friday March 01, 2002 @03:52PM (#3093126)
    Recently in Canada one of the hot topics of discussion is about the "brain drain" to the US, where IT grads were moving to California for employment due to low taxes and a stronger US dollar (although supposedly we're doing quite well with educated immigrants). Still it would be interesting to see how many of these workers (or even companies) are Canadian or have strong Canadian connections already.

    • Re:Interesting (Score:2, Informative)

      by Sakhmet (137111)
      Interestingly, the "Brain Drain" has also been called a hoax. It seems lately that a lot of skilled American workers are moving up here to follow the companies that are moving up here. Especially since Ontario has been named the most cost-effective place in North America to do business.

      And Canada is generally considered (I don't actually support this opinion) a "better" place to live than most other countries.

      Sakhmet.
      • Re:Interesting (Score:3, Informative)

        by Tackhead (54550)
        > Interestingly, the "Brain Drain" has also been called a hoax. It seems lately that a lot of skilled American workers are moving up here to follow the companies that are moving up here. Especially since Ontario has been named the most cost-effective place in North America to do business.

        At the height of the "Brain Drain" (Canada-to-US migration of skilled workers), Ontario was governed by a socialist party and had marginal tax rates about 10-15% higher than its current rates (umm, and in conjunction with the tax hikes, welfare benefits doubled, and the commie bastards in power were confused as to why they'd gone to record deficits for the duration of their rule). British Columbia was in a similar mess.

        Both parties were swept out of office in landslide elections (Ontario about 6 years ago, BC more recently) and neoconservative governments were put in place with aggressive tax-cutting policies.

        Federally, Canada had a debt-to-GDP ratio of about 70%, and similarly high taxes. (Canadian tax brackets weren't indexed for inflation when inflation was under 3% -- as such, there was tremendous bracket creep). In this case, the party in power didn't change, but its policies did, largely due to the actions of a reasonably-clued Finance Minister.

        Canada appears to have done the right thing - cut taxes, cut spending, foster growth. But 10 years ago, there was no light at the end of the proverbial tunnel, and in a move reminiscent of "Atlas Shrugged", many Canadians simply gave up on their country and came to the States to seek their fortunes in the dot-com boom.

        Of course, the dot-com implosion is the largest factor in people migrating from California to cheaper jurisdictions, but at the rate US legislation is going, a "reverse Brain Drain" may well take place in a few years.

  • Yup, the Bay Area is expensive. You get the world's best array of tech talent in a 100 mile radius. Thats going to cost you.
  • The burbs (Score:2, Insightful)

    by DCram (459805)
    I live, work and play in a high tech burb. Just outside of Boston but in the tax free state of New Hampshire. When I first moved to this area it was great. Tons of high tech, low rent and tons of people just like me who had just moved into the area. After 4 years I will say that everything has changed. With all the high tech moving in the rent has jumped up 4-800 dollars for a two bedroom and the jump is even higher for a 1 bedroom for some reason.

    I guess the moral to this rant is that no matter where you go to after a while its the exact same as where you left. The small town life doesnt remain the small town life for long as soon as the town fathers realize that they can make tons of cash off the tech industry.

    I cant wait for the days where a high speed access point and a video phone are all you will need and you can work from anywhere.

  • As a tech worker who has (recently) endured lack of jobs in this sector, I plead to come here. The cost of living is very low, we have Purdue, IU, and Rose-Hulman, the NCSA is right down the road, the Internet2 has a main artery here, and God knows we need more tech-savvy people here. We'll even change to daylight savings time for ya...honest.
  • by linux slacker (124381) on Friday March 01, 2002 @03:53PM (#3093143)
    It's funny that the article mentions Toronto as a viable relocation for high-tech companies - Toronto is generally considered as the most expensive city in Canada, followed by Vancouver.

    Calgary is attractive to employees because unlike most of Canada, there is no provincial sales tax, only federal sales tax (so they end up paying only 7% on everything they buy, as opposed to 15% like Ontario and the eastern provinces).

    One major centre which is not mentioned in Montreal - which is incredibly cheap compared to the other major urban centres in Canada. It's generally cheaper Toronto, Vancouver, Calgary, Ottawa in almost every category for employees (rent, car insurance, food, beer...) Only problem is that Quebec has a high rate of provincial tax, so maybe it factors out a bit in the end.
  • 'Blame Canada'

    he's already knocked us for taking some of the film industry (ok, he's not the only one.... but remember they created Hollywood in California for the good weather - now with the smog in LA they can't shoot much anymore)

    then there is the whole Hockey thumping... (damnit it's our sport anyways! :) but he was gracious enough to put up ar ereally nice post after the fact...

    and lastly there are those damn 'Canadian Cold Fronts' that make it snow in Texas... yes definately BLAME CANADA!

    ah.... all better now
    have a great weekend all!

    :)
  • by ffa (104185)
    Just a quick note: I am from Canada (Vancouver) and right now a US dollar gets you Cdn$1.592, which means company A who would pay employee XX US$70,000, can pay the employee Cdn$70,000 which is US$43,970 and save a grand total of $26,030. The employee would be totally happy, as the cost of living here is almost 1:1 when compared to most high tech centres in the States (ala Seattle, etc...) and the standard of living is just the same, if not higher, less traffic, beautiful nature and so on. As for education level, good universities here have the same level of education as good universities anywhere else, and due to the multicultural nature of Vancouver, there is a lot of talent that migrates here from other countries...

    So all in all, it would be a win-win situation for them... and it has the same time-zone as LA, Seattle, San Fran and so on (as opposed to going over seas which makes for a development nightmare! I have been through it, working with UK/Ireland - from Vancouver, and let me tell you it is NOT my idea of fun :)

    peace.

    -farshad
  • Never understoof. (Score:2, Insightful)

    by Torinaga-Sama (189890)
    I never understood why a business would want to station itself in the Bay Area. If I pay 450k for a 3 bedroom house, it better be on 25 acres, preferably waterfront.

    These guys are MBAs and they can't figure out how to spend less money. It blows my mind.
  • ... US immigration saying enough is enough. It wasn't a totally secretive technique by US companies to fool immigration into saying that the talent wasnt available stateside - it was, but salaries being damanded were too high. So the immigration dept was pressured into giving out more and more B1s (?) .. ie, work visas to immigrants, whether they were Indian or Canadian.

    Old hat tho. It happens (happened) in every industry. As the tech market becomes more 'bricks and mortar', the US will likely outsource much of its labour, although, as usual, not its executive staff. ;)
  • by bigmouth_strikes (224629) on Friday March 01, 2002 @03:57PM (#3093187) Journal
    Here's [homefair.com] a neat tool that let's you compare what your income would have to be elsewhere in order to have the same lifestyle.

    $100,000 in Oklahoma City compares to $279,000 in Menlo Park.

    I saw it on the Internet, so it must be true.
    • The Home Fair calculator is wrong. All it does is multiply your salary by a fixed number and then it claims that those salaraies are equivalent in the two cities.

      Homefair does not take into account the fact that many of our costs these days are interstate or not subject to local price limitations. The number for the "cheaper" state thus does not take into account that while local goods might be cheaper, vacations are not cheaper, mail-order computers are no cheaper, etc. In other words, a million dollars worth of caviar in Austin is probably about the same as a million dollars worth of caviar in New York.

      Also, people's spending habits and the mix of luxury vs. normal, local vs. imported vs. domestic goods changes radically as income scales up and down. No single multiple can ever really reflect the difference in how far salary will go for a wide salary range.
      • by Watts Martin (3616) <layotl&gmail,com> on Friday March 01, 2002 @09:11PM (#3095644) Homepage

        Well, actually, the HomeFair calculator does take the most important things into account, just not perfectly. It's using what's called a "cost of living index," which compares different categories of costs--rent, utilities, health care, etc.--and making the calculation based on that.

        No, it's not precise--by necessity it's using average COL values, presuming you are paying the median in all its values for everything. But it's not a bad ballpark estimate. Vacations and mail-order computers are not your most significant reoccuring expenses, are they? The most significant expense for nearly anyone is housing, followed (roughly) by utilities, transportation and local taxes. If I moved from Tampa to Santa Clara, the fact that a Titanium PowerBook is the same price in both places is immaterial. The fact that my $650/mo apartment here is an $1800/mo apartment there is very material... and that's the sort of thing that salary calculators do take into account.

  • Here in the Research Triangle Park, home to Red Hat, IBM, Cisco, Siemens, Motorola, Alcatel, Nortel, GE Aircraft Engines, Glaxo, Bayer, Fujitsu, AstraZeneca, and smaller software and support companies - this is the WORST its been in 30 years. On a national basis our labor costs are not even above average. I tend to think that failing companies relocate regardless of the cost of labor. The bigger problem is the cost of RENT in places like the Bay Area, SF.
  • by cswiii (11061) on Friday March 01, 2002 @03:59PM (#3093204)
    ...the fact that trying to actually get in to Canada "sucks [cbc.ca]".

    If all the high tech jobs move up that way, most Slashdot readers are gonna be working behind the counters at 7-11, unless Canada loosens its new immigration restrictions a bit.
    • Did you even read the article you link to?

      The points system is based on language skills, education, and work experience.

      Tech people from America can rightfully lay claim to all three.
    • by Tackhead (54550) on Friday March 01, 2002 @04:47PM (#3093687)
      > ...the fact that trying to actually get in to Canada "sucks [cbc.ca]".

      What could be harder than proving you have a college degree, can speak English, and a job offer? That's most of the "points" you need right then and there!

      Especially compared to the 6-7 years of hoop-jumping with INS -- an agency that seems dedicated to the propostion that terrorists can get in just fine on student visas, but technology professionals have to stick with the same job for the better part of a decade and beg for permission from a state employment agency (3-6 months), the federal department of labor (another month), then back to the INS to ask for permission to apply for a green card (between 3 months to 1 year), and then another year or two after permission's granted, to actually get the green card. Get laid off or company reorgs? Get on the next plane back home and start from scratch.

      If you've got half a brain and a degree, getting into Canada to do high-tech work is trivial.

      INS incompetency has made it clear that high-tech workers are neither wanted nor valued in the States.

  • "Sounds like American high tech workers are going to have to learn to say the word "eh?" a lot."
    I'd been meaning to leave the states anyhow. Too much willful ignorance here.
  • The one problem is - a tech company is composed of talented individuals. Most of the really talented people can find good jobs within their area, so they have less incentive to move to Podunk for just their career.

    You can move the company, but if only the lower half of the talent pool follows, it's not a very good decision.
    • If you live in the Bay Area you can change jobs twice a year for the next decade and still get off at the same bus stop. No other city in the world offers that density of opportunity.

      How many employees are going to move to JerkWater where their new employer is the only game in town??

      • Now I remember the reason I left Silicon Valley. The only maps you could buy in SV had everything east of Sacramento marked as "terra incognito".

        I think you need to actually visit more places than your one bus stop to actually know what the state of the other high tech areas in the country are really like so you won't show your ignorance making incorrect generalizations.
  • by feelafel (228034) on Friday March 01, 2002 @04:00PM (#3093216) Homepage
    Advantages:
    • lower fixed costs
    • have to pay less for skilled workers
    • health care is a cost savings for corporations
    • you can boast that you're a citizen of the nation with the greatest male and female hockey players
    • other nations don't have a seething hatred for you (justified or not)
    • better beer
    • funny comedians
    • really good music
    • an abundance of gorgeous people are our best kept secret
    • it's harder to get shot "by accident" here.


    Disadvantages
    • get paid less as a skilled worker;
    • almost 1/2 your paycheck goes to income tax, employment insurance, and the Canada Pension Plan (which will by dry in 10-20 years)
    • only one airline, and man does it suck
    • yeah, ok - it's a little colder
    • the healthcare system is spiralling downwards due to funding shortages passed onto the provinces from a sneaky federal government that wants to report a "surplus"
    • lack of world class cities and attractions


    One thing that I find ironic is that it was only a few years ago that Nortel was threatening to leave Canada because of its taxation rates which hurt corporations trying to compete against those in the USA.
    • by Anonymous Coward

      an abundance of gorgeous people are our best kept secret

      Ah, I see you don't live in New Brunswick.

      I swear, all I'm looking for is a woman with less facial hair than me and no kids. Are my standards just too high?

    • almost 1/2 your paycheck goes to income tax, employment insurance, and the Canada Pension Plan

      You should manage your money a little better. I make over $80K and pay out only 25% for those items.
  • by BlueMonk (101716)
    ...or should I say cents. Supply and demand, folks. What am I missing here? There's no reason whatsoever for most of these high tech companies to hang out in these high cost areas. You're jacking up the price for everyone else to live there just so you can form some geographical "high-tech band" in the US, when no industry could be farther from geocentricity than the high tech industries who've now finally gotten a clue. Take your business anywhere you can find electricity. For the price you're paying to run your company in the "high tech band" you could probably house all your employees and their families in dream homes in Iowa or someplace.

    I'm no authority, but I am just glad to see things finally evening out a bit. A town isn't meant to consist 100% of high tech profitable firms. They need teachers and "sanitation engineers" and whatnot -- the guys who don't make a zillion dollars a year to pay for the housing.
  • by RembrandtX (240864) on Friday March 01, 2002 @04:06PM (#3093292) Homepage Journal
    Baltimore Big Business Quotes:

    "When we gonna get us some of that them there health care Hon ?"

    "If we could switch to Solar Panels, we would use a lots less Earl (oil)."

    "Whys that there stadium say PSI-NET? Whoz that Hon ?"

    "Yea, this heres the new business capitals, we're right between Warshington and Napolis."

    [non baltimore residents need not laugh]
  • Here is Washington State we have 9+ % sales taxes, 2% (or maybe higher) B&O tax for businesses grossing more than $100,000. The Legislature is working on passing a 0.09 per gallong gas tax (Washington already has one of the highest Gas taxes in the US). Boeing is slowly leaving and the Department of Transportation still thinks that the solution is to build more HOV (carpool) lanes instead of adding more roads.

    And this doesn't even touch on all the regulations that must be obeyed.

    What do they expect businesses to do? There reaches a point where you have to either move or go bankrupt.

    Brian
  • by Embedded Geek (532893) on Friday March 01, 2002 @04:13PM (#3093361) Homepage
    Back in '90, I remember hearing that there were only a half dozen SEI level 5 software shops in the world. One of them was an IBM lab in India. That blew me away, so I did a bit of research.

    It turns out that due to the caste system, there has always been a surplus of highly educated, underemployed workers. It used to be that they emigrated to other countries, becoming doctors, lawyers, or engineers. With the telecommunications revolution, that is no longer the case.

    Today, there are literally thousands of offshore developers and IT workers who are rented out in large blocks for U.S. and European projects. I know that Best Buy and Target do at least some IT this way and have heard of others. At my workplace, every desk that was vacated in the layoff after 9/11 (including my wife's) has been reoccupied by an engineer from our new strategic partner [hcltechnologies.com]. Under the visa laws, they have to make comparable wages to a U.S. worker while here. When they go home (or work is shipped offshore to awaiting engineers), though, they make a quarter our hourly rate. With the cost of living offshore, this is still enough to be a king's ransom.

    On the whole, they seem like good people. It can be awkward at times, but I work well with them. Still, for the first time in my life, I understand the anger that Detroit autoworkers felt towards the Japanese back in the '70s. They found themselves out of work through no fault of their own, priced out because of international forces and the shenanigans of their employers and unions.

    Truth is, this is the new reality that IT workers in the "developed world" must face. We have to find our niches, clean up our processes, and find a way to make our labor worth four times the cost of sending our jobs overseas. Heck, that's basically what the guys in Detroit did. At least, the ones that are left...

  • That's exactly what we did. The whole company up and moved from DC to Portland, Maine last December. Real Estate's ALOT cheaper, the people are ALOT nicer, and the traffic is ALOT better.
  • I never saw the reason for companies to locate their headquarters in the most expensive and trendy place possible. How many companies out there need that much physical proximity to others in the industry? Think of all the small manufacturing shops you see in the most remote places, and they depend on raw materiels and suffer if the freight cost is too high. What excuse does the IT industry have? None, as far as I can see. There are literally countless locations across the country that are ridiculously inexpensive and have the high-quality of life that will attract workers.

    But no, IT corporations say "We need to move to San Franciso!". They are idiotic, and they get what they deserve for making such stupid mistakes, I have about as much sympathy for them as those who are rebuilding for the third time in the same location because putting up a house on a flood plain was a Really Good Idea (tm).

    Is there any compelling reason to be there, other than ego? In most - read: almost all - cases....no.

    Furthermore, what really gets me, is when companies have little or no revenue stream and decide to plop down in the most expensive place they can find and then set to work on maybe, you know....making some money.

    Here is a stunning idea, locate somplace inexpensive - if you think you won't get any employees or business by setting up someplace that isn't flashy you are ignorant or simply unwilling to accept the truth. Then, build your bussiness slowly, spend as little as possible, supply good, but not extravagant workspaces and equipment and do away with most or all luxuries and see what happens. You might actually last more than a year or two. And when your company grows, it might actually be sensible to move to somplace more upscale. You know.....when you can actually afford to.

    People just need to think for a minute, before they go off making dumb and obvious mistakes then crying about it later on.
  • The near mythic status of SF has to go. The idea that you can't do business without being in Cali or at least having a "west coast office" is bull, and has harmed the industry.

    That being said, I live in Fairfax Virginia and based on the employment section of the Post, it doesn't seem like people are exactly *flocking* to this part of the country. If they are, they aren't hiring. Its still pretty dismal around here, UNLESS you have a security clearance, in which case you have nothing but options... "Will code Perl to help fight the Taliban, please ignore that I'm a slacker misanthrope, that was cool in the dot-com days..."
  • San Francisco and Silicon Valley has an enormous critical mass of Gay/Lesbian/Bi/Trans people, and Nerds. The counter-culture continues to thrive here.

    For techies - it means that you are respected and accepted everywhere, no matter what you look like.

    It is the opposite of the nightmare world Jon Katz describes in "Voices from the Hellmouth". Nobody who has been dumped-on for being smart or diferent wants to go back out into the cold.

    Attempts to replicate the Bay Area have to replicate this tolerance too - which often requires a massive, slow change in attitude.

    -- Jamie
  • The huge variation in the cost of living among cities is why those "What Programmers Get Paid" surveys are one of my pet peeves.

    I always feel a bit inferior--for a second--when I look at how underpaid I am relative to the statistics in these articles. However, I quickly realize that these statistics are mostly from people in places like Silicon Valley, where a pup tent in someone's back yard costs $150,000.

    The fact is that these articles include naieve and misguided analyses of income. It is much better to just rely on a few real data points, such as those from recent job offers, and use local consumer-price-index numbers [bls.gov] to scale the salaries accordingly. It is suprising how $40,000/yr. in a small south-east city can easily equal $60,000/yr. in Chicago, for example.
  • Take off!
    To the Great White North.
    Take off!
    It's a beauty way to go.
  • Ok, I've got a few karma points to throw away:

    Q. How do Canadians spell Canada?
    A. C, eh? N, eh? D, eh?

    /me bows.

    Ok, now continue with the real conversation.
  • Canadia (Score:5, Informative)

    by maggard (5579) <michael@michaelmaggard.com> on Friday March 01, 2002 @04:23PM (#3093464) Homepage Journal
    No, I doubt lots of American high-tech employees will come flooding to Canada. For one thing it's rather difficult for a US'er to get a work permit. Like the US Canada gets lots of applications but has commitments like being a Commonwealth nation, there are different priorities. Furthermore with Nortel, Corel, and the like still hurting there's no employment crunch up here, no need to invite folks from south of the border.

    Next if US'ers moves here they'll be paid in Canadian dollars. While you'll live well in Canada it's a big pay cut from the US, especially when you add taxes on top. Furthermore prices in Canadian cities have started to rise and while they don't compare to NYC, Boston or SF they're still shocking the natives and expensive in local terms.

    Finally there are the cultural differences. While visiting Toronto or Vancouver may feel very familiar to a US'er that changes when you actually live here (Montreal is immediately obvious as being different.) There're the little things like brands being different, everyone being that one notch politer, and Curling being a real sport. There's also a dearth of ghastly evening news (you'd think Canadians are the world's worst drivers from watching TV news until you realize there aren't as many shootings and other violent incidents for the if-it-bleeds-it-leads stories) and lots more interest in international events.

    However there are even more important differences. One is the Quebec issue. This is where I live but it comes up everywhere across the nation: French language laws, government policies, separatism, and the economic shock-waves every time Quebec threatens to leave.

    Other significant differences:

    • Little separation of Church & State with things like religious lessons in schools.
    • However by-and-large Canada is more liberal then the US and does have far fewer of the extreme right-wing biblethumpers.
    • Canada doesn't place individual liberties above all else; the general good is at least as important.
    • The Provinces are stronger politically then US States and there's a lot more Federal/Provincial jostling.
    • Strong social policies often more in line with European models then US.
    • Political parties that don't map at all onto the US model.
    • Socialized Medicine (services are generally good in spite of the horror stories often heard in the States.)
    • Establishing credit across the border can be difficult, sometimes very difficult.
    • Lots of technology comes out later in Canada (wireless Palms) or not at all (TiVo.)
    • While Canadians get US TV & somewhat radio there are lots of programs, acts, and personalities that are big in Canada but unheard of in the US. Some are programs like "This Hour Has 22 Minutes [22minutes.com]" and others are bands that make Top-10 in Canada but never rise above Top 500 in the US.
    No, I like living in Canada a lot, and US friends love visiting, but ask any US expat. living in Canada and they'll tell you it is different and it's more then the good beer.

  • by Spoing (152917) on Friday March 01, 2002 @04:24PM (#3093479) Homepage
    Just so the rest of the US (and the world for that matter) realizes. Metro DC is congested with traffic (2nd/3rd? worst in nation), and is not cheap.

    That said, send some jobs over here. We need em!

  • by ebusinessmedia1 (561777) on Friday March 01, 2002 @09:11PM (#3095646)
    The exodus from SF is the beginning of a larger trend. India graduates nearly 40,000 highly qualified engineers *every year*. China, probably four times that, and climbing. The Law of Lowest Wages, combined with increasing commodification of technology will drive many companies out of the US entirely within the next dozen years. Roughly 46% of our working population works directly or indirectly with technology. Think about what boardroon executives probably already considering as they make plans for future capital and physical investment. Capital is 'on the wire'. Domestic fealty just doesn't cut it for public corporations; not in a world where profit is king. There will still be strong technology innovation coming out of the U.S. for many years to come. However, much of the implementation of that innovation will not necessarily have to be performed by people here in the States. We're facing the very beginning of a huge social displacement problem. Look at the San Francisco phenomenon as a micro-trend that will soon snowball. Our domestic planners (an oxymoron?) had better start preparing for this and look for ways to either keep people fully employed, or actively interested in a slowed-down version of the 'good life', or we're looking for real trouble down the road.

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