Cost of Living in Tech Hubs Could Drive Salaries Higher

The upside of working in a major tech hub such as San Francisco or New York City: salaries are often generous. The downside, of course, is the cost of living is often high, as well. For employers, that sometimes means calibrating salaries higher so that tech professionals can live comfortably.

But no matter where they live, tech professionals are reportedly feeling the crunch of expenses: According to a new survey by Hired, some 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 main reason to relocate, ahead of the 19 percent who said they’d move to pursue a specific job opportunity, and 14 percent who wanted to live closer to family. (Around 41 percent said they’d move to experience a new city.)

This data dovetails with Dice’s own findings, which show that high-expense cities can stretch even the fattest tech paychecks to the absolute breaking point. Here’s our chart of the best and worst cities for tech salaries, in the context of the cost of living:

As you can see, the “big” tech hubs such as San Francisco/Silicon Valley, Seattle, New York, and Washington, DC all put the squeeze on tech professionals when it comes to cost of living. Those tech professionals who want more bang for their buck move to places such as Detroit, Raleigh, Tampa, and Portland, where $500,000 will buy you a house instead of a studio apartment.

For software developers, there’s also a handy state-by-state breakdown of the U.S. Bureau of Labor Statistics’ salary data, revealing which places pay out the highest and lowest average salaries for those in this field. Obviously, they head to places such as California, New York, and Washington for the highest overall wages; but there are several non-metropolitan areas where the pay is quite good, as well:

In other words, it’s not like your average tech professional needs to move to one of a handful of locations if they want to obtain that magical combination of decent salary, good work-life balance, and reasonable cost-of-living; with the rise of remote work, as well as nascent tech hubs across the country, this kind of dream is achievable in many places.

For employers, paying above-average salaries is often a perquisite to hiring in the major tech hubs; if you’re not willing to shell out that kind of cash for specialized talent, someone else will. Make sure you know what local pay-rates are like before making your offer.