Defector Part #10 Refugee Crisis: White People The New Economic Refugees Entering Eastern Europe And Asia 5/5 (2)

There is a new refugee crisis gaining speed in western highly developed economies–especially technology driven economic zones and cities in the United States . No, it’s not black muslim Africans from North Africa fleeing their war-torn homes–it’s middle and upper-class anglo Europeans and Americans who can not afford over-priced housing and entrepreneurs who can’t afford to pay white-collar employees a six-figure dollar annual salary to launch their start-ups. This housing and labor shift is quickly being replaced by South Korea, Thailand, India, Ukraine , Russia and even Poland. All it requires is the will to renounce citizenship, and the intellectual desire to learn another language. In many cases, after the move to another country where housing and labor resources are 50 to 70% cheaper the new ex-pats eventually relinquish their home citizenship in exchange for permanent residency or completely new citizenship of their new home. But let’s examine the struggle of highly paid tech engineers in Silicon Valley, California USA.

But what are the alternatives for software and tech management employees not only in America but also in Western Europe? They re-envision their lives as new entrepreneurs, taking their know-how and capital to start technology business ideas that were denied at their previous employer. But how could a software engineer afford to move to another country with their family, buy a home, hire a staff and launch a new technology product? let’s examine the income and liquidity of the average expat-defector.

ten year income trend silicon valleyAmerican software engineers and anyone working in IT basically earn more than any other country in the world. It is the cost of housing that has cracked the savings income of these brilliant employees. Even the incremental increases of income every year can  not out-pace the increase in housing costs to purchase or rent a flat for a single employee or employees with a small families.

housing bubble in california is destructive

The IT employee that in 2016 at the time of writing this article , earns from 90,000 to $150,000 a year can not save enough money quickly to make a $300,000 dollar cash down payment on a million dollar home, nor can he afford to pay rent on a 2 bedroom home which in many cases can be as high as $6000 dollars a month. So, the problem is clear–if he pays rent then he has no saved money [down-payment capital ] at the end of the year to contribute to downpayment and home purchase via the “home loan”. If he has [ or she ] has some capital saved and co-worker also in the same predicament–the trend now is to start a business and new life in another country. Many IT professionals have established global teams in Eastern Europe and in Asia–where the cost of highly educated and `English speaking It professionals is dramatically lower.

Ukraine:  [these prices are a reflection of the minimum requirement most IT expats pay]

rent : $500 [large 2 bedroom apartment}

food: $500 [ notice that the food and rent expenses are almost equal in the first year for male expats, but decreases when he has a Ukrainian girlfriend/ wife– and they begin eating more at home and not in restaurants. ]

other expenses: $1500 [ travel / medical / language courses/ gym membership/ other]

minimum total $2500 to $3000  monthly income to live comfortably in ukraine as an entrepreneur  that is in the first stage of organising a local team to conduct an IT project or register eventually an IT company that can receive “outsourced projects ” from America.  Annually , the American expat would need minimum $25,000 to $30,000 just for living expenses the first year in Ukraine.

This cost does not include the capital to A] register a business in the territory of Ukraine  B] salaries for local hired staff [Ukrainian IT professionals] C] rental costs of business work space.





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What about people not in the IT sector?


I see a positive side of this issue. Let me explain, Mr. X is an IT professional in the first world country, however, he does not earn enough to support his family. He will migrate to a third world country (read developing country). He will not earn as much as in his home country, however, his earning will support his family because the living cost is low in developing countries. Furthermore, his knowledge will help the developing world.