A ranking of the highest tech salaries in the US, adjusted for cost of living

https://qz.com/1195354/tech-salaries-in-austin-texas-are-effectively-66000-higher-than-in-nyc-thanks-to-the-cost-of-living/

by dangrover • 8 years ago

54 45 8 years ago

qz.com

electricslpnsld• 8 years ago

Unfortunately one meal at Franklin Barbecue, while delicious, will immediately exhaust any extra savings one might accrue through the cheaper cost of housing.

RhysU• 8 years ago

True, but the HEB tortillas are so cheap it's a wash.

paulddraper2• 8 years ago

This entirely depends on what you spend your money on.

Suppose NYC real estate is 8x the cost compared to my current city of Lehi, Utah.

* If I want a large house with a yard, I'll pay $500k with $1.8k/month mortgage in Lehi, or $4 million with $14.4k/month mortgage in NYC.

* If I want to share a smallish apartment, I'll pay $400/month in Lehi, or $3.2k/month in NYC.

Non-real estate items like groceries, gas, and gym memberships are not 8x more in NYC. (They're more, but not that much more.)

---

So.....what am I comparing? Good housing, or good transportation, or good hobbies, good savings, etc.? I'm assuming the measurement averages these, but people prioritize and consume these different than the average.

If you live in a cardboard box and save most of your pay check, you'll get an overall pay raise in NYC.

aphextron2• 8 years ago

* If I want to share a smallish apartment, I'll pay $400/month in Lehi, or $3.2k/month in NYC.

That's not even remotely realistic. $3,200/mo in NYC will get you a luxury 1bd in Manhattan. $1500 is more like it for a small studio or roommate situation.

paulddraper2• 8 years ago

(1) NYC has rent controls but not property value controls, so that does throw things off.

(2) Perhaps I should have done the numbers with 4x. The idea is the same.

souprock• 8 years ago

The entire list is expensive cities. This is a typical problem for such lists. It's easy to ignore nearly all of the country.

Austin did best, but that isn't cheap.

joshuamorton• 8 years ago

Naively adjusting CoL like this always over-corrects and favors lower cost places. This would only be a valid comparison if you saved exactly $0 each year. If you are able to save a portion of your income (as hopefully anyone with any of these salaries is), linear comparisons don't make sense.

You need to compare the difference in CoL as the percentage of that salary that goes towards CoL. In other words, if you save 50%, to keep the same standard, you need to CoL adjust only the other 50% (and maybe a bit more to keep your emergency fund weighted).

grumble

sotojuan• 8 years ago

You need to compare the difference in CoL as the percentage of that salary that goes towards CoL.

Great insight. Here in NYC, I know a few frugal programmers who share a 2 bedroom with a friend such that he pays about 25% of his income in rent (that's A LOT of money to save/enjoy life with). Another is nearing 40% but because he prefers living alone. And there's always the "I want to live like they did in Friends/I want a 10 min commute" coworker that spends 60%+ on rent.

These kind of studies make it seem like most people live like the latter, when my personal experience as an engineer in NYC, the city is not unaffordable at all ... unless you want to own property ASAP. Honestly, what I've learned is that COL discussions are hard because people spend money differently and value different things.

jdtang13• 8 years ago

This would only be a valid comparison if you saved exactly $0 each year.

Sounds like me. Just kidding, this is a really valid point, and I never thought about this missing variable.

sjwright• 8 years ago

Except it matters what you eventually do with those savings. If you end up spending that money in the same city. Therefore the GP really should have said:

This would only be a valid comparison if you don't plan to repatriate a substantial portion of your earnings to a low CoL city.

mirashii• 8 years ago

Totally agreed, and I personally remind people of the savings aspect quite often. If you target saving a percentage of your salary, like many people do, 20% in the NYC is a lot more savings than 20% in Montreal.

This particular article is even more egregious though. Having the "adjusted tech salary" in Austin be $200k is a little bit absurd. I don't understand how they possibly got these numbers, but the process seems even more flawed than just neglecting to talk about savings.

armenarmen• 8 years ago

I'm guessing that a part of the $200k's justification is that Texas has no state income tax, which results in an immediate 12(?)% raise when moving from CA

arebop• 8 years ago

Isn't $0/year savings a pretty realistic estimate for Americans? It agrees with the stats I've seen, which admittedly aren't focused on the tech industry or the top 5% income quantile.

xyzzyz• 8 years ago

This article is talking explicitly about tech jobs, and for tech workers, $0/year savings is not realistic unless they are in particularly dire situation (for example, below average job, lots of debt, and medical problems in family at the same time).

acchow• 8 years ago

Also over-corrects for people who spend a significant amount outside of the country/city they live.

arikrak• 8 years ago

Also there are many things people spend on that don't cost more in one place than another, e.g ordering from Amazon. Or going on vacation to another area.

andrewmutz• 8 years ago

Or does it just assume that your savings eventually get spent in the city in question?

You would be able to save a nominally higher amount in a high cost-of-living area, but if those funds ultimately would be spent in that place, then is it an important distinction?

closeparen2• 8 years ago

Two major use cases for savings are paying the rent if you’re laid off, and making a down payment on a house. Both of which depend on local CoL.

JamesBarney• 8 years ago

This is only true if you are going to spend your savings in a place with a cost of living. I'm not sure what % of people move cities when they retire but leaving behind an entire life after you've sunk grown roots has it's costs.

TheCoelacanth3• 8 years ago

It pretty much all comes down to the basket of goods that you assume that will be purchased.

If your basket of goods includes a few acres of land these estimates will dramatically underestimate how much more expensive NYC is than low COL areas.

If your basket of goods includes a lot of world-class arts and dining NYC would probably end up being less expensive than a lot of low COL areas because you would have to do a lot of traveling out of the low COL area for that.

People have widely differing preferences of life-style so it is very difficult to come up with a single number to describe COL differences that applies to very many people.

banku_brougham2• 8 years ago

I’m not so sure. In Austin, with the average salary you could buy a house. In New York, no way.

sambrand• 8 years ago

This reflects more or less what we found, in 2016, in the Stack Overflow Developer Survey:

https://insights.stackoverflow.com/survey/2016#salaries-and-...

TLDR: Move to Montreal.

nadezhda182• 8 years ago

glad to read your conclusion! I live in Montreal and I do think it has a surprisingly low CoL combined with a high-quality lifestyle. Glad to see it is confirmed by your data.

I personally live in a 3 bedroom apt I rent for $635 a month ($795 if taking into account the electricity used for heating) and the apt is located 25 min by public transportation (foot + metro) away from downtown.

aphextron2• 8 years ago

I personally live in a 3 bedroom apt I rent for $635 a month ($795 if taking into account the electricity used for heating) and the apt is located 25 min by public transportation (foot + metro) away from downtown.

Wow thats incredible. What are salaries like though?

analyst74• 8 years ago

These kind of CoL comparisons have obvious flaws as pointed out by other comments. I brushed them off when moving from Toronto to SF, only to realize later how accurate they are, if you don't plan to dramatically reduce your living standard.

On a side note, there are legit reasons why most people try to keep up their appearances as opposed to live frugally and save every penny.

chocolatebunny• 8 years ago

Hey I did the same thing late last year. I gave up a bungalow I payed $1200 a month (bought it 2011) for for a one bedroom apartment I pay $2400 a month for. Yay! But I live alone so a 50% boost in income offsets the doubling in housing costs (I think). And honestly, outside of housing (and healthcare) I don't really see anything else being too crippling.

svachalek• 8 years ago

Another thing to consider about CoL comparisons is local lifestyles. Those who are living in SF or NYC are probably out of the house enjoying local nightlife a lot, those in warm sunny places are probably out enjoying nature, while those living in cold suburbs probably spend a lot more time on home and hobbies. So, in some places you can buy a lot more house while in others you need a lot less house. In places where housing is expensive there's also a lot less peer pressure to have a big house; it's not like all your coworkers in a SF startup are talking about their 4 bedroom ranch houses.

deathanatos• 8 years ago

it's not like all your coworkers in a SF startup are talking about their 4 bedroom ranch houses.

No, but they can't talk about something more reasonable, either; the price of the majority of the Bay Area's housing exceeds the income of the majority of Bay Area engineers.

(This assumes a median house price of ~$750k (cf, [1]), and an unwillingness to pay 45% of your after-tax income in housing.)

[1] http://sanfrancisco.cbslocal.com/2017/12/29/bay-area-median-...

adverbly• 8 years ago

There is no way that 73k in Toronto is the same as 153k in San Fran. I wonder if the 73k is in CAD or USD... Regardless, the average home in Toronto is around $1m CAD, plus you lose a bit more to taxes because you live in Canada. I have a hard time believing that things are 3-4X as expensive in San Fran. Are people really paying $60 for a burger?

jjeaff2• 8 years ago

Average Toronto home value is $775k to the Bay area's $825k. Don't know how the other stuff compares though.

SwellJoe• 8 years ago

I suspect studies like this trail reality by a few years. Austin cost of living, particularly housing, has sky-rocketed in recent years. It's still obviously much cheaper than Silicon Valley, but it's not cheap compared to surrounding major Texas cities like Houston or Dallas.

It may still be a good balance of salary to cost of living, and probably is since most tech hubs are also very expensive. But, it's not like it once was (I first bought a house there in the early 2000s, and have rented, and shopped for real estate, there on a number of occasions since then).

dmode• 8 years ago

These cost of living calculators are severely flawed. It fails to capture that RSUs form a significant % of compensation in the Bay Area. It also fails to capture the exponential impact of high dual income. Also, fails to account for rapid income gain from real estate appreciation. Finally, fails to account for the ability to switch jobs quickly and climb corporate ladder.

jjeaff2• 8 years ago

The average silicon valley programmer is not taking advantage of the rapid gain improperly values. On the contrary, they can't afford to buy so they rent... And their rent goes up every year as values skyrocket.

purplezooey• 8 years ago

Nice to see San Diego up there. Thinking of moving there after 10 years here in the bay.

ablekh• 8 years ago

Since when Atlanta is not a major metropolitan area? Based on a super quick research, I would expect ATL to, at least, lead the chart, if not land at its top.

moltar• 8 years ago

How’s Toronto double of what it is adjusted? Toronto living is not that low. It is in real estate bubble, and food is expensive compared to US. No way that’s accurate.

A ranking of the highest tech salaries in the US, adjusted for cost of living

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