San Francisco is actually one of the worst-paying places in the US for software engineers

Booking the first train to Texas!
Booking the first train to Texas!
Image: Ted S. Warren / AP Photo
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Software engineers are among the highest-paid workers in the US: the average salary for a Silicon Valley developer is around $120,000, about three times the median wage in the rest of the country. (This is how good it is in this particular sector of the US economy: even summer interns in Silicon Valley get about $81,600 per year if you annualized their monthly take-home).

But the inflated salaries in the San Francisco Bay Area (and New York) can’t compete with the value you get from the cheaper cost of living in cities such as Austin, Seattle, and Denver. “When you adjust for the cost of living, [San Francisco] is one of the lower-paying places to work in the US,” says Jessica Kirkpatrick, a data scientist for the online hiring platform Hired.

Hired analyzed 280,000 interview offers and job requests for software engineers all across the globe  (the data includes 45,000 candidates) on its platform, and found that, adjusting for factors such as rent, transportation, and groceries, every city except New York is more lucrative than San Francisco. Hired’s unusual model—they pre-screen candidates who post their work history and preferred salaries so companies can request interviews and extend offers—gives them insights into salaries. 

Developers in the Texas boomtown of Austin earn an average of $110,000, equivalent to being paid $198,000 in San Francisco (where the average salary in real terms is $134,000). And these traditionally second-tier cities (at least when it comes to tech) are seeing their comparative advantage grow: In the last year, those living in Los Angeles had a 14% increase in purchasing power compared to San Francisco.

This lines up with what other job sites, such as Indeed, are seeing as new tech hubs rise alongside average salaries outside the Bay Area. “As more tech job seekers realize this, it has the potential to steer talent toward metro areas outside Silicon Valley and contribute to the growth and geographical diversification of the technology industry as a whole,” Daniel Culbertson, an economist at Indeed, wrote by email.