Close your eyes and picture this.
You work for one of the biggest tech companies in the world, a company where thousands apply every year, hoping they get one of the most coveted jobs in the world.
You live in one of the biggest cities on the west coast, full of brilliant people working on the latest groundbreaking technologies.
Your commute to work is 5 minutes, and your company’s beautifully designed campus has ice cream shops, free restaurants, dry cleaning, and more. On top of that, although the areas house prices are through the roof, you have some of the lowest rent in town because your company subsidizes it.
Sounds like it’s just a dream? A fantasy land of the future?
It’s real and it’s already here.
If you work for Facebook, there’s a chance you live in their new housing development, and you bike 5 minutes to work every day. Facebook’s “company town” hasn’t been all ice cream shops and pet foxes. Company towns have a sordid history, one that comes with some baggage.
What Is a Company Town?
Company towns have been a part of American history for decades, ranging from construction, textile mills, lumber camps, coal mines and other trade industries. Although there has been some controversy surrounding labor ethics and the treatment of employees by some company towns through the years, other company towns were known for being Utopian, providing workers and communities with fancy amenities and luxuries.
A company town is a community where all stores, housing, and facilities are owned by the company or the main employer. Employees that work for the company are provided with a suite of amenities and items, such as housing, stores, schools and other recreational facilities.
Although company towns have evolved significantly throughout American history, there are still advantages and disadvantages to being employed by a company town, especially as tech jobs salaries continue to climb.
The Many Faces of the Company Town
The company towns you’re probably the most familiar with are the mining towns in the early years of the twentieth century. Employees would get a job at a mine, receive regular pay by the company, with rent and housing, living expenses, food, and even schooling for children taken out of their pay.
Although this provided a sense of security for employees and their families, some miners’ expenses would end up being worth more than their actual wages. In some cases, miners and workers became “enslaved” by the company town. This was the company’s way of ensuring cheap labor and keeping workers from leaving.
Fortunately, there are company towns that treated their employees/residents a lot better than that. While some companies did abuse the residents of the town, driving them deeper and deeper into debt, some towns were born out of a company president’s values. Some men, like the Cadbury’s of England, felt it was a moral obligation to provide for their workers and created beautiful towns for their employees to live in.
Other company towns were designed to be a paradise for the residents, such as places like Hershey, Pennsylvania, built by the Hershey chocolate company. These company towns wanted to attract workers with fancy amenities, luxuries and an ideal life. Modern-day company towns lean towards this model, trying to drive recruiting while reducing employee turnover by providing convenient places to live and work.
Facebook: A Modern Day Company Town
Although we talk like company towns were a thing of the past, the truth is that company towns still exist today. In fact, one of the biggest modern day company towns was built by Facebook. In fact, according to a video published by The Wall Street Journal, Facebook is all about “community” – and in more ways than one.
A lot of companies have learned that they need to add benefits beyond the normal health insurance and company discounts. We’ve seen bounce houses, nap rooms, massage therapists brought in for employees, free food, and ping pong tables.
But Facebook brought it to another level.
In 2013, Facebook announced its initial plans to build its first-ever housing project, designed to be an extension of its campus, which was designed to look like a mix of Disneyland and Palo Alto, Facebook’s original headquarters.
The Facebook housing project is situated in Menlo Park, California and features 394 units as well as everything that you’d find in a five-star resort, including a swimming pool, laundry and cleaning services, ice cream shops, free restaurants, coffee shops, and even doggy daycare. Facebook housing is open to anyone in the community and subsidized housing is available for Facebook employees.
Although one might think that it was Facebook’s idea to build a housing community, following its beliefs and mission around the importance of “community” and to remain as the social media giant they are known as today, however, it was actually the employees who approached Facebook leadership requesting housing closer to campus for suburban commuters.
So, what do Facebook employees and Menlo Park residents think about Facebook housing?
In addition to becoming a popular housing complex that a lot of people try to move into, Facebook also had plans to hire another 6,500 employees within the next few years. In an effort to keep up with public and company demands, in 2016 Facebook proposed plans to build another 1,500 units near its campus in Menlo Park, a plan that sparked some concerns from locals, residents, and public officials.
Some saw this as a company driven gentrification of their town. Some saw it as a boost to the local economy. Either way, when a company-built subdivision goes in, life changes for employees and the local residents.
The Advantages and Disadvantages of a Company Town
As a young adult who’s having trouble finding affordable housing near their work, living in company town like Facebook’s seems like an obvious no-brainer. But it’s not quite that simple.
Let’s take a look at some of the pro’s and con’s of living in a company town.
The perks are great. Everything is built around your life. You’re close to work, the designers of the town had employees like you in mind and it shows in the amenities. Modern-day company towns are designed to keep you around, which means they’re going to throw more luxuries at you then a normal housing development.
A company town is designed to give employees a deep sense of comfort, security, and community, providing them with a lot more than the standard employee benefits. If you’re planning to stay at a company for a long time, a company town is a pretty great deal.
However, living and working for a company town might not be the answer for individuals who want to stay ahead of the market. In fact, one of the biggest drawbacks to working for a company town is the longer he or she works for the company, the more out of alignment with the market they become.
Additionally, research has also shown that individuals actually make more by switching jobs over the course of their careers. According to an article published by Forbes, employees who remain with one company longer than two years are paid 50 percent less.
Paysa is constantly analyzing, tracking, and updating information on salaries, how salaries rank to specific jobs, and even stay up-to-date on market trends as well as what other companies are up to. In fact, Paysa has conducted significant research on the companies that are infamous for underpaying their tech talent – another disadvantage to living and working within a company town.
It is very likely companies know that people who live in a company town are a lot less apt to move to another job, primarily because they’ll be leaving their friends and neighbors, along with all the convenient amenities. Facebook’s not the only one building developments like this. Companies like Google and Apple have considered or have already built housing developments similar to Facebook’s.
Is Living In a Company Town Worth It?
Although the days of enslaving miners and factory and industrial workers are long gone, company towns still exist, as we have seen with Facebook. However, this doesn’t mean that today’s companies aren’t trying to get away with hiring “cheap” labor. Many companies have been caught underpaying employees, particularly their tech talent – a risky move in today’s digitally driven era.
Company towns certainly provide a level of comfort, security, and community and several other benefits that workers typically cannot find with any other company. However, individuals also risk their salaries over the course of their careers by remaining loyal to one company. Company towns are designed to do just that, keep people close to work, so they form social and emotional bonds around the company.
Is it worth the risk? Should you give up future salary for security and comfort now? Is a company town right for you? Check out Paysa for tools, resources, and other personalized information that can help you make more informed decisions about your career choices.
What do you think about living in a company town? Do you live in a company town? Let us know your thoughts in the comments below.