Silicon Valley is notorious for its stratospheric tech salaries and cost of living to match. But a new tech salary report released by jobs site Hired.com on Thursday indicates that companies in tech hubs elsewhere, such as Los Angeles and Austin, are quietly raising salaries to become more competitive.
According to Hired.com’s third-annual State of Salaries report, the average tech worker in Austin made $118,000 last year — up 7% year-over-year — while the average tech worker in Los Angeles and Washington, D.C., earned $129,000 and $116,000, respectively, in 2017 — 6% more than they did in 2016.
Those salary increases outpaced the average increase for tech workers overall around the globe, which rose 5% last year to $135,000.
Technically, salary for tech workers’ in Los Angeles and Austin still pale in comparison to the average San Francisco Bay Area tech worker, who earned an impressive $142,000 last year. But it’s worth noting that the Bay Area’s cost of living remains significantly higher. To wit, the average rent for a one-bedroom apartment in San Francisco as of December 2017 was $3,372, according to apartment rental site RentJungle, far higher than a similar set-up in Austin ($1,229), as well as in Los Angeles ($2,168).
To determine how other cities fare in a cost of living comparison, Hired.com asked the hypothetical question: how much would tech workers’ salaries be worth if other cities had the same cost of living as in San Francisco? Austin topped the list again for 2017 with an adjusted salary of $202,000. (Translation: Austin tech workers would have to get an $84,000 raise to maintain their current standard of living in San Francisco.) Meanwhile, Los Angeles and Seattle both tied for second place with adjusted salaries of $182,000.
Hired.com’s State of Salaries report was compiled based upon 420,000 interview requests and job offers that occurred in 2017 through its online marketplace from more than 10,000 participating companies and 69,000 job seekers. The company also collected survey responses from over 700 tech workers to factor in how salaries and cost of living influence decision making and levels of satisfaction. To adjust for cost of living in any given tech hub, Hired.com employed data from the site Numbeo, which factors in things like rent and real estate prices, cost for groceries, transportation, utilities, and local taxes.
Hired.com’s report also found that U.S. tech companies continue to pay more than employers in Toronto, London, and Paris, all of which reported far lower five-digit salaries for 2017 and lower salary increases for the year.
The UK also saw a 7% decline in hiring candidates from outside the UK. According to Hired.com, the decrease is a result of the broader UK economy, which now sits at the bottom of the G7 after being a top economic performer before Brexit.
So regardless of where tech workers live, work and play in the U.S. whether it be Austin or far costlier Silicon Valley, there’s something of a silver lining: their earned incomes — and likely quality of life — are much higher than many of their counterparts abroad.
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JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.
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