High Cost Of Living Shrinks Silicon Valley's Sizable Paychecks
Silicon Valley is a mecca for tech workers. Not only is it home to some of the world's best known and most influential technology companies, but landing a job there can result in a handsome paycheck.
The downside is that the region south of San Francisco Bay is a pricey place to live, which raises the question of whether it's worth moving there for a job.
It's a question that piqued the interest of the folks at Focus.com, an online network of business and technology experts. To get a better idea, they pulled together data from numerous sources, comparing the average pay for top-paid software engineers at Silicon Valley's best-known hi-tech firms, along with overall average salaries in the area, the cost of living and other factors.
Among the group's findings, annual salaries for common tech-sector jobs paid on average 11 to 37 percent more, depending on the type of job.
Project managers, for example, earned a nationwide median salary of $83,400, but in Silicon Valley the median is $92,000. The disparity among Java/Web developers was more dramatic. Nationwide, workers holding these jobs earned $61,407. In Silicon Valley, however, high demand has pushed the median annual salary there to a whopping $97,149.
The downside, of course, is that the cost of living in Silicon Valley well exceeds other metropolitan areas -- including even pricey New York City. Focus.com found that the cost of basic necessities exceeds the national average by 62 percent.
A driving factor is housing, which at about $775,000 for a single-family home, costs nearly 3 times as much as the national average. Apartment rentals are also more expensive -- 76 percent more than average in the U.S.
So while tech workers in Silicon Valley earn an average $92,300 a year, their counterparts in New York City only require $74,800 to match the same standard of living. Tech workers in cities in other regions, such as Dallas and Philadelphia, require just roughly half of those in Silicon Valley to live just as well.
Taxes also take a bigger bite out of California workers' paychecks, with those earning annual salaries in excess of $46,776 paying 9.3 percent in state income taxes. The average wage earner in Silicon Valley would save nearly $43,000 a year just by moving to Florida, where there is no income tax, Focus.com notes.
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. Follow David on Twitter. Email David at email@example.com. Add David to your Google+ circles.more...