The Rise of Remote, and Demise of San Francisco

By Jesse Powell

The debate over Proposition C will be settled in a few days and San Francisco’s life is on the line.

Why are the stakes so high? Because San Francisco’s population of high earning knowledge workers and highly mobile tech companies already have one foot out the door.

“If you want more of something, subsidize it; if you want less of something, tax it.” — Ronald Reagan

Well-intentioned policies aimed to serve the homeless, mentally ill and drug-addicted have gone awry and proven themselves to be a failure, if not contributing to a worsening situation. Saying that more money is the solution is like saying the fire hasn’t gone out because we haven’t poured enough gas on.

The city’s pathological tolerance and enablement of antisocial behavior has resulted in its deterioration to a shit-covered, syringe-laden, zombie-overrun dystopia. Open drug use is rampant, violent outbursts and physical attacks a common occurrence. It can get worse.

We do not have a contingency plan.

It is not a question of whether we have a humanitarian crisis on our hands. It is not a question of whether people deserve second chances, dignity and respect.

How do I tell my employees who are suffering from PTSD from being attacked by crack-zombies right outside our office that they need to keep coming in?

The question facing San Francisco right now is two-fold:

  • What if more money does make the problem worse?
  • What if everybody who can leave does leave?

San Francisco is in as especially precarious position because of the demographics.

  • heavy on tech business, which has no physical/geo dependence
  • heavy on young, single and mobile knowledge workers
  • light on native residents, families and children

People are not rooted. They’re flight risks and the decision to leave gets easier with every walk to work each day, every zombie encounter, every tax hike.

Tech companies and the highest paid residents leaving will mean reduced property values, reduced sales and reduced employment. The city needs to be prepared for a reduced tax base. It might actually be the rock-bottom scenario required to shake its messiah complex.

The highest earners and the largest companies are decreasingly tethered to any particular physical location. Cities must fight to keep them.

Disruptive trends in remote work:

  • Knowledge work becoming increasingly remote as online collaboration tools improve.
  • Remote-able knowledge workers physically relocating for highest quality-to-cost of living, or perpetually ‘nomad’.
  • Education availability increasing and cost decreasing as it migrates online, raising the available global supply of capable knowledge workers.
  • Competition among knowledge workforce increasing as remote work becomes more acceptable, and quality of global knowledge workers increases.
  • Wages for remote knowledge work are converging globally, which will lead to reduced wages for those in the higher wage local markets, prompting physical relocation.
  • Global competition among jurisdictions for business domicile as companies become increasingly remote and mobile.

Consequences:

  • Ability for local governments to effectively tax business revenues and employee salaries is diminishing.
  • Tax base will increasingly be sourced from local property owners, brick-and-mortar, sales, imports, tolls, things that can be physically accounted for.
  • Cities must compete fiercely to attract the physical presence of the high earning knowledge workers, who will spend locally and strengthen the tax base.

Conclusion for San Francisco:

  • While already one of the worst QoL:CoL, a tax on its highly mobile businesses will only serve accelerate their exodus.
  • The city must not put its humanitarian charity work ahead of its ability to be competitive as a domicile for residents and businesses. Frankly, “Tech” is some of the least toxic business you could hope to bring to your city.
  • It is not enough to stabilize the situation. The city must quickly make improvements to public health and safety on the streets.
  • Private security escorts, private cars, personal PTSD therapists, catered meals, all to deal with/avoid the fucking war zone on the streets is already a tax. Only thing missing is hazard pay. Don’t push it.

Other random thoughts:

  • What would a contingency plan for Prop C look like? Perhaps more people would be willing to take a chance on increased financing if we could all agree up front that if that fails, we’re doing a 180 and making dramatic cuts, cracking down on bad behavior, holding benificiaries accountable.
  • What would happen if we outsourced certain social services to a jurisdiction that was not as expensive as San Francisco? What if we instead financed services in lower cost areas of the state/country/world, and assisted people in getting to those help centers?
  • Why, with so many humanitarian crises globally, do we expect SF Tech to only pay for SF problems? Isn’t it selfish that we don’t divert those funds to more serious issues abroad?
  • What if social workers become the next hated class for flooding to SF and jacking up the rents after Tech leaves?
  • You’re a hypocrite if you call yourself a humanitarian while holding a gun to another honest man, looting his pocket to pay for your crusade

About Crack-zombies:

  • No, I’m not referring to the homeless or mentally ill, or drug users, though there could always be some overlap
  • No, I don’t include them among “persons” because, while human, they are not held accountable for their actions, we cannot make moral judgements about them, and they behave like unpredictable, dangerous, wild animals.
  • No, I don’t believe that they are all beyond recovery
  • Yes, I believe they deserve to be treated with dignity
  • You know them when you see them

Anyway, vote however you want on C. I am just as curious to see the experiment play out as I am convinced it’ll be a disaster. We’ll be watching from afar, of course.