US cities try to lure remote tech workers with cash – the new stack

Cities and small towns are offering buckets of cash to attract residents who can work remotely. Wall Street Journal It was reported last week.

It’s a newspaper trend that’s been documented before. “A lot of people ask, ‘What do you do in Topeka?'” said the 41-year-old telecommuter. They used to ask me,” he said. Journal In October. “Okay, they’re giving me $10,000.” They were just one of 19 recipients of Topeka’s largesse, and Topeka was one of dozens of cities offering “incentives to lure remote workers,” the Journal wrote.

The logic is simple. Instead of competing to attract companies to the city – why not just convince them. workers Instead? “These places successfully attract and retain each remote worker like getting a piece of a new factory or corporate office,” the Journal reported last week (quoting the policy director at the Brookings Institution, who said the cost is much lower and less risky).

“Because these economic development programs are relatively modest, even small communities can get into the game in ways they never knew existed,” the journal added.

Certainly, a new Apple office in town can jump-start the city’s economic activity. Enrico Moretti’s 2012 book The new work geography It is estimated that for every new high-tech job in the city, five non-high-tech jobs are also created – waiters, hairdressers, carpenters, nurses, teachers, lawyers. But the Journal points out that it costs more to attract entire companies or offices to a region than to try to attract some of their employees.

“An argument could be made that it’s a new type of incentive program for parts of the country that are not in tech growth — courtesy of big tech companies,” Moretti wrote.

One unexpected benefit for companies willing to hire remotely? Their diversity will improve.

On the move

According to the listings on MakeMyMove.com, nearly half of the states in the U.S. now have a city that offers some kind of incentive. Alaska, Alabama, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Nebraska, New Mexico, New York (Buffalo or Rochester), Ohio, Oregon, Pennsylvania, Tennessee, Texas, Vermont All West Virginia and Wisconsin.

MakeMyMove describes itself as a “digital marketplace” that matches cities that lure remote workers, and the Journal says cities and towns are now contracting with the site to develop relocation incentive programs. Early last summer, MakeMyMove listed 40 programs, but that number has grown to 71 programs today.

“If the past two years have taught us anything, it’s that life is too short (and the days are too long) to stay stuck in a place you don’t like,” MakeMyMove wrote in a recent blog post.

#Tulsa It has been released in 18 places. #AmericasBestCities List as of 2020, and being noticed. @GatherTulsa @GreenwoodRising And our own # Remote work community. 🤩https://t.co/uOkNQivo2d

— tulsaremote (@tulsaremote) July 19, 2022

How is he playing?

As the Journal noted last week, “These programs are particularly targeted at high-wage remote workers, who make up a disproportionate share of those who take advantage of them and work in tech — especially at big tech companies.” One example the newspaper gave was a more than $5,000 incentive for an Amazon engineer who moved to Greensburg, Indiana (population: 11,221).

Participants for the program in Tulsa, Oklahoma, have worked remotely for Adobe, Airbnb, Amazon, Apple, Dell, Google, Microsoft, Lyft, Netflix, Oracle and Siemens – and was also an IBM program manager. He told the newspaper – “I felt loved and known here in a way I never knew before” – I was even elected vice president of the neighborhood society.

There’s also a Meta remote worker in Tulsa who previously lived in a one-bedroom apartment in Silicon Valley and told the Journal that it’s less expensive to rent a three-bedroom house with a backyard in Tulsa. “I was able to find myself to some extent.”

Tulsa’s program is funded by a philanthropy — the George Kaiser Family Foundation — and most programs get their money from their own city’s economic development fund. And the Journal’s Tulsa program has drawn 1,360 people to the city — a number expected to grow to 2,400 by the end of this year.

But it’s not just Tulsa.

In October, the Journal reported that 71 people were moved to Alabama through a $600,000 program (funded by a half-cent sales tax) administered by the Shoals Economic Development Authority.

And 50 other remote workers (and 60 family members) were heading to West Virginia in a $25 million program started by Intuit’s executive chairman and his wife. Hundreds more have been drawn to Vermont — even though “some lawmakers have questioned whether the fees they charge when people go there are really fees.”

He headed in that direction

In the year 2012 An economics professor’s book warned of a “great divergence” in “innovation centers” and other people.

There is a charge against the programs.

Tessa Conroy, an assistant professor at the University of Wisconsin-Madison, warned the Journal that some program participants may be considering moving to the city.

And if they weren’t – well, that presents its own problem. “Surely this is a good resident, the paid man?”

A 41-year-old telecommuter in Topeka even told the Journal, “We don’t have to stay forever. But if we like, we can.

Conroy suggested another approach: investing money to keep current residents from moving away.

But the programs bring high-income people into the community. Since its inception, the Tulsa program has brought in workers with an average income of more than $104,600, according to an analysis by the Economic Innovation Group (provided by the program).

But that analysis also calculated that the first team ultimately generated $51.3 million in new domestic income “directly attributable to those relocated remote workers,” while also boosting the economy by another $10.7 million and creating the equivalent of 198 new full-time jobs. (That represents one new job in Tulsa for two remote workers who will be relocating at that time.)

The study notes that these initiatives have the potential to generate “significant returns” by 2025, projecting $500 million in new domestic revenue.

The report begins by stating that many otherwise “heartland” communities struggle to attract and retain highly educated workers and face “slow growth in high-tech, high-wage industries and jobs.”

Membem’s entrepreneurial spirit is evident, and my company, @QuirkChat It’s a part” -Bee Law, moved from Concord, NC. pic.twitter.com/5FDlRzu6OF

— tulsaremote (@tulsaremote) July 20, 2022

But are cities now competing against each other for remote workers instead? This is “the new arms race,” the CEO of the Stillwater, Oklahoma Chamber of Commerce told the Wall Street Journal in October. Two people who received offers from the city replied that they were still considering incentives from other cities — an entrepreneur at 3M is working on a spreadsheet that tracks the benefits of remote workers in each city.

Changing workplaces

Before the pandemic, at the end of 2019, 4 percent of remote jobs in the U.S. advertised salaries above $80,000 — but that figure has risen to 15 percent by the fall of 2021. That’s according to a report in the Wall Street Journal in October, citing statistics. The CEO of job site Theladders.com argues that the trend is a “real structural and lasting change in the American workforce.”

A Gallup poll of full-time workers in the United States last September found 25% work from home full-time — and another 20% part-time. But the figure was even higher for white-collar workers, with 67% saying they were working from home only (41%) or at least part of the week (26%).

However, the poll’s most compelling statistic was how much workers liked the arrangement. “In America, 91% of workers who telecommute at least some of their hours hope to continue being able to work from home after the pandemic… Three in 10 telecommuters say they are more likely to look for another job if their company eliminates remote work. He said.

And while employees are definitely on board with working remotely, there can also be unintended benefits for companies.

At January’s Slack “Future Forum,” the research consortium’s preferences for remote or hybrid work were high among Hispanic, black, and Asian/Asian-American knowledge workers, and this week Facebook’s chief diversity officer said remote work is helping to recruit (and retain) them. Additional workers from underrepresented groups.

“Silicon Valley was not a place where black people dominated,” the executive told the Post in an interview. “So you’re seeing people choosing places like Atlanta, New York.”

In the year Between 2021 and 2022, Meta’s U.S. workforce will decline by 1.5% in the percentage of white workers, with what the Post described as a “small jump” in the percentage of black, Hispanic, multi-racial and Asian workers. (And the number of female leaders jumped 1.2%, with a slight increase — less than half a percent — for the number of black and Hispanic managers.)

By emphasizing specific cities, perhaps remote work will add new voices to our conversation—a possibility that is being explored by some investors.

At O’Reilly’s startup Alphatech Ventures, publisher Tim O’Reilly learned the importance of “Silicon Valley’s geographic isolation.”

In the year In a 2020 interview with TechCrunch, O’Reilly argued that while Bryce Roberts, his longtime investment partner, pursued a variety of investments in various locations, he “found entrepreneurs who naturally reflected the diversity of America.” % female founders and 30% people of color).

So maybe working remotely will eventually redistribute opportunity.

Dozens of American cities are now exploring that possibility.

Feature image via Pixbay.