A growing number of U.S. cities and towns are beginning to lure skilled employees of large companies to settle locally and work remotely by giving out cash grants and other perks. The practice is attracting more highly paid tech industry employees away from Silicon Valley and transforming the local economies of U.S. cities and towns.
Some similar programs have been in place for years, but have begun to receive widespread attention in the last two years. By one count, there were at least 24 such programs across the United States in October of last year. Today, 71 cities and towns have contracted with the company to create such programs, according to Indianapolis-based MakeMyMove.
Because these programs are specifically targeted at high-paying remote workers, the participation in these programs is primarily for tech workers. Employees participating in the Tulsa, Oklahoma remote worker incentive program come from a variety of tech companies such as Adobe, Airbnb, Amazon, Apple, Dell, Facebook parent company Meta, Google, IBM, Microsoft, Lyft, Netflix, Oracle and Siemens.
The local government is offering cash incentives of up to $12,000 (about $81,240) for those willing to relocate to the area, as well as fitness subsidies, free babysitting and office space.
Because of the relatively small scale of these economic development programs, even small communities are able to participate. Greensburg, Indiana, is one of the towns doing so, with a resident population of just 12,193.
Skeptics may ask why local economic development programs are spending money to subsidize those highly paid Silicon Valley employees. Since these remote workers don’t come to small towns to find work locally, they are also a refreshing stimulus to parts of the country that have been sidelined from the tech boom by big tech companies.
Some of these companies are very pleased with the turn of events. In April the home-rental platform Airbnb said almost all of its employees could work anywhere they liked and keep their full salaries. Airbnb even touts its product as a way for remote workers to find temporary housing, a company spokeswoman said.
Mark Muro, who studies cities and workforces at the Brookings Institution, argues that the success of these places in attracting and retaining every remote worker is like getting a fraction of the expense and risk of getting a new headquarters or corporate office for a big tech company.
Jason Mathew, a product manager at IBM, has traveled to major U.S. tech hubs, including San Francisco and Austin, and found the economic burden of each place increasingly high. To his surprise, Mathew found that Tulsa was the place for him. “I feel more love and understanding here than ever before,” he says.
The Tulsa Remote, a privately funded program in Tulsa, drew Matthew to settle here. That sense of possibility, community belonging and mission is what the program is trying to promote. So did David Gora, who works for Facebook’s parent company Meta, where he screens third-party developers to determine whether they should have access to the social media platform.
“In a way, I found myself,” Gora says. Before moving, he had never lived anywhere in the U.S. other than California. Other reasons Gora likes Tulsa include the lack of commute, the lower cost of living and the higher quality of life compared to the Silicon Valley cities where he used to work and live.
Justin Harlan, general director of the Tulsa remote program, said the Tulsa remote program has been launched since 2018 to attract remote workers for example, but at the time they represented only 3 percent of the total U.S. workforce. By October 2021, the epidemic is forcing 45 percent of the nation’s full-time workforce to telecommute part-time, according to market researcher Gallup, and more U.S. cities and towns are deciding to try to attract them to settle locally.
The Tulsa TeleProject is the largest of these programs in terms of the number of people it attracts, and it has a distinct advantage over most of them. The Tulsa Remote Project is funded by the George Kaiser Family Foundation, a local philanthropic organization. In 2020 alone, the foundation is investing $181 million in various programs. By comparison, almost all similar programs in the United States must be funded from local economic development budgets.
By the end of 2021, Tulsa’s remote programs had brought 1,360 people to the city. By the end of 2022, the total could exceed 2,400.
From chasing factories to chasing tech employees
“It’s the new version of the chase factory,” says Roy Bahat, head of the venture capital firm and a former economic development official in New York City. Local governments in the U.S. used to compete with each other to attract factories, offices or other job-creating infrastructure to their localities. Bahat added, “It’s like what Ohio did when it committed more than $2 billion to attract a microchip factory.” He was referring to the various incentives Ohio used to convince Intel to locate the new plant in the state.
A study commissioned by the Tulsa Remote Project concluded that such projects create one new job for every two people brought to the city.
Economist Enrico Moretti’s study, on the other hand, showed that for every high-wage tech job added when a company moves its offices locally, five more jobs are created in areas such as health care education and services. That’s because business involves not only people, but also money to build and maintain facilities, pay commercial property taxes and more.
Gora says Tulsa’s possibilities, community affiliation and sense of mission drew him to the city. His girlfriend recently moved to the city as well.
Moderate impact
Many towns don’t have the budget to attract large companies to have entire offices or factories located locally. Bringing in a small number of remote technology employees has a limited impact on the local economy, but it also requires a much smaller investment.
Doug Waltz (Doug Waltz) involved in the project is such. Waltz is a typical Amazon engineer, well paid, enjoys the benefits and the flexibility of working remotely.
What’s atypical about him is that, as a newcomer among the 12,000 permanent residents of Greensburg, Indiana, Waltz is estimated to be the only Amazon engineer within a 50-mile radius. The package of incentives he received for moving to his new home included an outright $5,000 bonus, a year of free office space, a gym membership, and more time to care for his 1-year-old and 3-year-old children.
The Greensburg program is small compared to the Tulsa remote program, with an annual budget to attract only a handful of telecommuting employees.
Community and quality of life are critical
Many teleworkers say that what incentives they could get motivated them to consider moving somewhere, but were not what convinced them to make the decision to relocate. For Waltz, wanting to be closer to his wife’s family in California was the deciding factor. As a product manager at IBM, Matthew was single but wanted to start a family. For him, Tulsa had the potential to allow him to achieve his ideal life. Gora decided to stay in Tulsa, in part because his girlfriend had recently moved in with him.
Other influences, such as inflation and the U.S. housing crisis, were also important. Today, Gora can buy a three-bedroom apartment with a yard in Tulsa for less than he could buy a one-bedroom apartment without air conditioning or a dishwasher in Santa Clara, Calif. Gora says Meta has saved a lot of money and has a much better quality of life than before, despite implementing pay cuts for employees who move to areas with a lower cost of living.
Since moving to Tulsa in 2020, Matthew has become the landlord of the four-unit apartment building where he lives, been elected vice president of his community association, and launched a side project in the form of a new startup and app.
“What keeps me here,” Matthew says, “are the opportunities,” and the people.
