A software engineer at Twitter who earns a base salary of $160,000 told The Guardian earlier this week that his pay is "pretty bad" when it comes to raising a family in the Bay Area. Is it really that bad? Is he underpaid? And by how much?
A new report from research firm Paysa concludes that he may well be right. The company recently completed a study that revealed the 10 U.S. cities where tech industry employees are most likely to be underpaid by at least 10% according to the market value for their skills.
Not surprisingly, perhaps, in the nation's big technology hubs where there is a lot of tech talent available, a worker's chances of being lowballed on base salary are the greatest. The Paysa study also noted the 10 cities where total compensation packages (including such things as stock options) for tech workers were most likely to be low. Finally, the study listed companies that are most likely to underpay and those that are most likely to pay tech workers what they are worth.
Two overall results that should not surprise anyone: the likelihood that women are underpaid is 45%, while men are likely to be underpaid about 38% of the time; second, the younger and less experienced you are, the greater likelihood you will be underpaid. Tech workers with two to five years of experience have a 44% chance of being underpaid while workers with 20 or more years of experience have a 24% chance of being underpaid.
First, here are the 10 U.S. cities where base salaries are most likely to be too low, along with the percentage of workers who are underpaid by at least 10%.
- Seattle: 77%
- Boston: 39%
- Pittsburgh: 32%
- Washington, D.C.: 29%
- Austin: 28%
- Los Angeles: 27%
- San Francisco: 24%
- San Jose: 24%
- San Diego: 22%
- New York City: 21%
Here are the 10 cities where the total compensation packages are most likely to fall below market value.
- Seattle: 60%
- Boston: 44%
- San Jose: 40%
- San Francisco: 37%
- Los Angeles: 37%
- Austin: 37%
- Washington, D.C.: 33%
- Pittsburgh: 32%
- New York City: 30%
- San Diego: 29%
The 10 cities in each list are the same, but after the top two, the order changes.
Why are Seattle and Boston at the top of both lists? Here are the 10 companies that are most likely to underpay their tech workers, along with the percentage of workers at the company that are underpaid and the company's headquarters city.
- Accenture: 90%; U.S. headquarters in New York City
- Glassdoor: 83%; Mill Valley, California (near San Francisco)
- Pinterest: 80%; San Francisco
- Microsoft Corp. (MSFT): 75%; Seattle
- Dropbox: 65%; San Francisco
- Airbnb: 63%; San Francisco
- Lockheed Martin Corp. (LMT): Bethesda, Maryland
- Facebook Inc. (FB): 59%; Menlo Park, California
- Uber: 56%; San Francisco
- International Business Machines Corp. (IBM): 55%; Armonk, New York
Six of the top 10 are based in the San Francisco-San Jose area, the historical Silicon Valley. Microsoft, Lockheed and IBM all have significant operations in the area, and Accenture operates one of its seven international Labs in San Jose.
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And which companies pay best? According to Paysa, these are the 10 companies least likely to underpay.
- Netflix Inc. (NFLX): 0%; Los Gatos, California
- Bloomberg: 6%; New York City
- Qualcomm: 14%; San Diego
- Yahoo! Inc. (YHOO): 17%; Sunnyvale, California (San Jose)
- Capital One Financial Corp. (COF): 17%; McLean, Virginia
- Yelp Inc. (YELP): 17%; San Francisco
- MZ (Machine Zone): 18%; Palo Alto, California
- WalmartLabs: 24%; Mountain View, California (San Jose)
- Amazon.com Inc. (AMZN): 26%; Seattle
- Intuit Inc. (INTU): 27%; Mountain View
The full report is available at the Paysa website.