A new study from Indeed shows that salaries are higher in smaller towns after accounting for the cost of living—except when it comes to tech.
In other words, if you work in an industry such as healthcare, it might prove worth it—at least financially—to live in a place like Fargo instead of New York City. But if you’re a technologist, it pays off to live in a big tech hub, even when the (occasionally insane) cost of living is factored in.
“Even after adjusting for those costs, tech salaries are still 5 [percent] higher in the largest metros than in the smallest ones,” Indeed reported. “And tech salaries in metros between 250,000 and 500,000 people are higher yet—and nearly the same across mid-size, large, and very large metros.”
It’s helpful to keep in mind that Indeed is also comparing the same occupations across cities: “We’re not comparing well-paid machine learning engineers in big cities with online help technicians in smaller places.” But which cities actually boast the highest salaries for technologists? Check out Indeed’s list:
There are a lot of interesting things to unpack here. Although Indeed’s thesis is that tech salaries are highest in the big tech hubs (even with cost of living taken into account), none of the country’s biggest tech hubs—San Francisco, New York City, and Seattle—are on this list. Indeed doesn’t really seem to tackle that issue, stating simply that: “Adjusted tech salaries are somewhat lower in the Bay Area, Seattle, and Austin, but the broad pattern is that tech jobs pay better where tech is more concentrated.”
Other studies have suggested that the biggest of the big tech hubs are increasingly out of financial reach for many technologists, even with high salaries and record-low unemployment. For example, a recent survey by Blind showed that 59.24 percent of tech pros couldn’t afford to buy a house in the Bay Area; in Seattle, it was almost as bad, with 47 percent of tech pros reporting an inability to purchase a home of their own. “The issue is many people who live in San Francisco and the rest of the Bay Area don’t make enough to afford to buy a home so they are stuck renting,” Blind wrote in a blog posting accompanying that data. “The same situation applies in Seattle too, though to a lesser extent.”
Meanwhile, the Dice Salary Survey revealed that, despite high salaries in Silicon Valley, the high cost of living erodes even the most generous payouts (sorry, machine-learning specialists!). With tech salaries plateauing, some tech companies have begun offering generous perks and benefits in lieu of additional cash, and that’s great, but free snacks and a solid healthcare plan still won’t get you a one-bedroom in Mission Bay.
Take a look at how Dice’s salary data compares to cost of living in some of the biggest and mid-size cities in the U.S.:
And even if technologists can afford to live in their city, they’re increasingly convinced that the cost of living is too damn high. According to a new survey by Hired, just 53 percent of tech professionals think they’re compensated fairly given the cost of living in their city, while 47 percent do not. Some 26 percent of respondents said that the opportunity to live in a less-expensive city was a primary reason to relocate, ahead of the 19 percent who said they’d move to pursue a specific job opportunity, as well as the 14 percent who wanted to live closer to family.
This isn’t to say that Indeed’s data is wrong. Boston and Washington, DC are major tech hubs; cities such as Raleigh and Detroit are up-and-comers on the tech scene. But when you study the biggest of the big tech hubs—New York City, Seattle, and Silicon Valley—it’s clear that the smaller-city advantage cited by Indeed’s data might not always apply.