It has been Duke of Data Andy Yan who has been reminding us forever that there is a radical disconnect between household income and the price of housing. People working in Metro Vancouver can’t afford to buy housing here.
In 2017 Mr. Yan summed it up this way:
“It’s surprising to me that we have only the 15th highest incomes in Metro Vancouver, even coming behind Toronto. What we learned today is in Vancouver you are living in paradise, but your wages are in purgatory.”
The median household income Mr. Yan was referring to is $72,662. At that time he saw the major issue was how to reconnect local incomes to local housing, noting that needed policy enactment would be different in each city.
Photographer and former editor of Price Tags Ken Ohrn sends along this article by Natalie Obiko Pearson who writes that Amazon. com is expecting to triple its workforce in Vancouver. Why? Because software engineers here are “cheap, smart and plentiful”, like an overabundant agricultural crop.
A conversation with an Amazon vice president revealed that a “weak loonie, lower wages and a steady flow of graduates make Canada an attractive place to expand for tech companies whose largest expense is labour”.
The salaries in Vancouver are substantially less than for similar jobs south of the border, as are office rents.
“The average wage of a software developer in Vancouver last year was $92,726, compared to $141,785 in San Francisco or $128,067 in Amazon’s hometown of Seattle, according to a July report by real estate firm CBRE Group Inc. Once rental costs are folded in, the cost of running a 500-employee operation in the Canadian city is half that of a similar-sized operation in the Bay Area, it found.”
You can take a look at the CBRE reports on Tech Talent and Trends here.
Vancouver has the “fastest-growing” tech labour pool and that quality and work experience is in the top ten of all the fifty labour markets analyzed by the firm. I have already written about Amazon repurposing the old downtown Vancouver post office which was to house 2,000 employees by 2020. In fact 2,700 Amazon staff now work downtown with a total of 8,000 jobs anticipated by 2023 in the redeveloped post office which will house 1.1 million square feet.
And there’s a call right now for 3,000 workers for Amazon in downtown Vancouver.
The YouTube video below from November 2019 outlines how the post office is being renovated to accommodate the new Amazon work space, using some unique approaches to construction.
Image: BusinessInsider
Here’s a piece that helps explain the relatively low wages. https://vancouversun.com/news/local-news/how-migration-wars-impact-metro-vancouvers-high-tech-sector
Interesting piece, thanks for the link. The big wage disparity seems to be Canada vs. the US, and I wonder how much of that can be explained by the differences in the way Canadian taxes and universal benefits are structured.
That’s the tech sector. Vancouver wages are relatively lower across the board compared to other Canadian cities, some of which have comparable immigration rates.
Deleted as per editorial policy
What else keeps wages so low here if the effects of immigration are factored out?
Just a note on the “People working in Metro Vancouver can’t afford to buy a house here.” reference.
Perhaps “house” should be “home” (which would include condos)?
“House” tends to mean freestanding doesn’t it? (I always think that), which to me means single family home.
… and the suggestion that everyone should be able to buy a single family home probably isn’t what you wanted, is it?
Vancouver doesn’t have lower incomes than Toronto or Montreal. Every sub group you can look at in the census has people in Vancouver making more money than Toronto or Montreal. Vancouver’s median household income is only lower because there are more single person households. It’s a statistical artifact.
It is definitely cheaper to pay someone in Vancouver than in California or Seattle but there is lots more going on.
Vancouver has always had lower tech wages than major US centres. The presence of growing presence of the big US firms is putting significant upward pressure on wages. There are very few software engineers working for the big US firms who make as little as the average. That average is pulled way down because so many of the tech jobs in Vancouver are still local firms that pay terribly.
Also immigrants don’t cause Canadian tech workers to have lower wages. The big tech companies which pay so well have come here in no small part because excellent people from all over the world here. Education and immigration are a driving force behind the increase in jobs and wages.
Having a huge number of good high paying tech jobs *should* be awesome for Vancouver, as long as we don’t follow San Francisco in the crucial mistake of not allowing nearly enough housing and letting prices get driven into the stratosphere.
Excellent article – and comments as well. House needs to be defined. Currency needs to be defined as well. Every $ sign needs to have a CAD or USD following that puts all of us at an equal understanding (about 35% difference). Yes, perhaps Canadians are still the “hewers of wood” that they were historically. Of course, we know there’s much more affecting housing price levels in Vancouver, including the still pent-up cash in Hong Kong and China that also affects other cities on the Pacific Rim – Sidney, San Francisco, incl the high-tech areas surrounding the Bay, and Auckland.
I don’t think the title “Are Vancouver’s Talented Tech Employees Cheap Labour” is really reflective of the issue. Cheaper labour is more accurate, and completely expected. Geographic movement of any kind has to be driven by something, usually price or quality, sometimes politics. If something is cheaper here, it is exported, if it is more dear, it faces imports. This applies to goods, services and talent. The movie and television industry largely moved up here from California because it was cheaper here. The tech sector is following suit. In the same vein, the garment industry that used to exist here – and there did use to be one – is now mostly gone. (I remember as a child somewhere near the brewery that was on Arbutus, there was a mill weaving tartan fabric. The looms were fantastically loud, and they kept the fire doors open on a warm day. And in the early 90’s along Beatty street across from the parkade, there was rows of sewing machines on the upper floors of the old buildings with some sort of elevated racks for the large thread cones. It looked like a scene from the 19th century.) And we ought to welcome this movement. It will help level off those wage disparities that exist between Vancouver and Seattle.
If tech workers organized and bargained collectively they could improve their own situation and help other workers improve their own deals by driving up wages and benefits.
Instead we get folks brainwashed into being doughty individualists getting crap deals and driving down the rate for info worker wages.
I wish they would do us all a favour and unionize.
Unions in the software industry for software developers do NOT exist, to my knowledge. Most shops are too small and people hop around every few years. Only once they arrive at a large well paying shop like Microsoft, Amazon, SAP, Hootsuite, FaceBook or Google could they unionize but again, that is VERY UNCOMMON to UTTERLY UNKNOWN.
Lower paying jobs might be unionized, such as security guards
SW developers who think they get a “crap deal” (to quote your language) usually leave, either within Vancouver area, Canada or hop to the various US tech hubs like Seattle, Boston or Bay Area, but of course smaller centers do exist too by the dozens in the US or Canada. I did that in my software days in the late 80’s to early 2000’s. Many [ like me then ] even manage to physically work in Canada but get paid in US $s – the ultimate dream !
Size is not the problem. Self-damaging beliefs about the economy that are inculcated into tech workers is the problem IMO.
They (tech industry workers) could organize and benefit us all. As long as tech worker fights tech worker they will always be little people in the big scheme of things to paraphrase the movie version of T.E. Lawrence.
Instead we see rights, benefits, and pay packages heading in the wrong direction and weakening our economy while enriching men with too much stuff already. Toxic and in need of addressing.
https://www.natlawreview.com/article/union-organizing-among-tech-workers-ready-to-breakout
And it’s immigration rules.
Even MIcrosoft opened a branch plant here to shift H1B workers from India who couldn’t get such visas to work, for a term, in the U.S.
Vancouver is convenient, and cheap.
Even the Vancouver Economic Commisson Office’s report to lure the mythical new Amazon HQ noted the comparable difference of northern peasants to U.S. wages.
Covid-19 working-from-home has changed much of this equation
And to clarify, “working for a term” means one year under the L1 visa which allows corporations with US offices to move employees to the US without going through the H1B lottery. In this respect, Vancouver is the “farm team” — a stop on the way to the big leagues.
The 50 page Van Econ. Commish report is here
https://www.vancouvereconomic.com/amazonhq2/
and the internal link is
https://storage.googleapis.com/production-vec-uploads/2018/02/Vancouver-
Amazon-HQ2-Proposal-Feb-2018.pdf
Visas on page 17
Page 6
Our talent competes with the best, yet we have
the lowest wages of all North American tech hubs.
Combine that with some of the lowest office space
costs and the benefits of Amazon diversifying its
foreign exchange profile, and you have a compelling
proposition that positions Vancouver as the most
sustainable, low-cost operating environment for
Amazon’s HQ2
page 28 Graphs of comparative wage costs across North America
Page A10 (full page 40)
Appendix E | Labor and Wage Information
[ and that was at the Canadian dollar at 80 cents to the US dollar, cheaper now. (and less Coronavirus) ].
Links
vancouvereconomic.com/amazonhq2
and the internal link is storage.googleapis.com/production-vec-uploads/2018/02/Vancouver- Amazon-HQ2-Proposal-Feb-2018.pdf