Watching Google buses roll in San Francisco and Silicon Valley, it’s easy to think tech workers make a lot of money. Do they?
Well, when you look at technology news regarding salaries nationwide, the answer is yes, driven partly by a talent shortage.
According to Entrepreneur, they make handsome salaries, at an annual average worldwide of $135,000. That said, there is variation from city to city. (Entrepreneur is citing data from Hired.com, which looked at over 69,000 people searching for jobs, 10,000 tech companies, and 700 people who worked in tech.)
San Francisco Bay, Seattle Workers Have the Highest Tech Salaries in the U.S.
The place with the highest salaries was the San Francisco Bay area, home to Silicon Valley and many of the top tech companies. Tech workers there make an average yearly salary of $142,000.
Seattle, home of Microsoft and Amazon, has the second-highest annual average salary, at $132,000.
New York City and Los Angeles are tied for 3 and #4 places, with an annual salary of $129,000.
Austin, Texas also makes the list, but with a lower yearly average salary, at $118,000. This figure grew 7% between 2016 and 2017, so at least the Lone Star State has velocity in its tech salaries.
Salaries go the furthest in Austin, Texas, due to the comparatively lower cost of living.
Cost of Living Makes a Difference, as Does Age
Triple digits sound great, right? But there are other factors at work in whether the lives of tech workers are all champagne and caviar.
The top 4 slots in the U.S. in terms of salaries are also areas with very high costs of living (COL), especially in real estate.
You have only to look at the effect of real estate prices in New York City. Tech workers there make $13,000 less than their counterparts in the San Francisco Bay area. Real estate prices in San Francisco and Silicon Valley are notoriously sky-high. But real estate in New York City is even more so, even after adjusting for the COL, tech workers they make $6,000 less than folks in the San Francisco Bay.
In fact, New York City tech workers are at the bottom of the cities surveyed in terms of what their tech salary bucks will buy.
Tech workers looking for a business strategy to maximize their incomes vis-à-vis COL might look at Austin.
The $118,000 average tech workers there make goes much further due to Austin’s relatively low COL. It stretches their income to an equivalent of $202,000, in fact – a whopping increase.
In other words, if you’re a tech worker in Austin and get an offer in the Bay area, they would have to give you $84,000 more just to keep your purchasing power equal.
Another factor affecting tech salaries is age. The biggest salary, on average, is reached when tech workers hit 45 or so, at $151,000. After that, until retirement age, the average tech salary falls, to roughly $150,000 or below.
The moral of the story of tech salaries? Austin, Texas will stretch your bucks and don’t expect to earn more in your 50s. But you will certainly earn nicely, worldwide.