Tech workers in the SF Bay Area are paid higher because the cost of living (specifically housing costs) are extremely high. One of the items in a recent salary survey from Hired examined how far tech salaries stretch when compared to the SF Bay area:
So, even though you may be earning a bigger paycheck living in the SF Bay Area, your money will go significantly further in cities like Austin and Denver where your adjusted salary becomes $224K and $202K respectively.
This comes at a time when I’ve come across a few articles that state that in light of the rise of remote working arrangements, people are weighing whether or not they should stay in the SF Bay Area. While I personally have yet to come across anyone who is planning to leave, I have spoken with people who question whether they should live in the middle of a city (like SF or NYC), as opposed to a suburb.
The survey also had interesting nuggets pertaining to remote work:
Nearly one third of tech talent would be willing to accept a reduced salary if their employer made work from home permanent. Over half (55%) would not.
Half of tech talent want to return to their office “at least once a week” post-COVID, but only 7% report wanting to work there every day.
90% of tech talent believe the same job should receive the same pay, regardless of remote work, but, when factoring in cost of living, 40% say they support location adjustments.
One important consideration is that rents are falling in urban centers. So some of the adjustments for cost of living (in the chart above) will need to be tweaked in light of new realities in rental markets in places like San Francisco. A new CNBC article noted that:
According to Zumper, the median rental price for a one-bedroom apartment in San Francisco fell 11.8% year over year, from $3,720 to $3,280, beating May’s 9% drop. The survey also reports a 1% uptick in national rents, with the average median apartment in the U.S. renting for $1,229 in June.