
San Francisco is one of the worst-paying places in the US for software engineers - davidjnelson
https://qz.com/906086/san-francisco-is-actually-one-of-the-worst-paying-places-in-the-us/
======
chubot
Another way to look at it: the absolute amount of money you save matters,
especially if you're young. It's better to make a lot and save a lot. And I
don't think it's too hard to save money with a $160K salary, unless you have
kids.

That is, the salary to expenses ratio isn't the only thing to look at.

For example, if you save 10% of your money in SF and make $150K, that's $15K a
year in savings. If you save 14% of your money in Austin and make $100K,
that's $14K a year in savings.

Even though you went through 90% of your salary in SF and only 86% in Austin,
living in SF is better, because you saved more money in absolute terms. You
can move elsewhere and take advantage of that savings.

If you only care about money, the ideal strategy is probably to move to SF in
your 20's, make a high salary, and then move out of SF. A lot of people these
days don't have kids until their 30's. (Anecdotally that seems to be what a
lot of people have done in the past decade -- move out of the Bay Area when
they want to have kids.)

This also doesn't account for the fact that SF has more "outliers" and more
choices. You might be pleasantly surprised by the kind of job you can get or
the kind of money you can make in SF. In most cities (certainly not all), you
probably won't be surprised. The job market is what it is.

(I'm assuming something about their methodology here, feel free to correct me
if I'm wrong.)

~~~
loeg
Your numbers are just not in the right ballpark. The pay gap between SF and
Austin is not as large as your figures, and the COLA gap is _far_ larger.

I think an Austin engineer making the average $110k can save more even in
absolute terms than the SF engineer making the average $134k.

The median rent for a SF 1BR is $3370, or $40,440/yr[0]. The median rent for
an Austin 1BR is _$1150_ , or only $13,800/yr[1]. Rent alone ($26,640) has
already consumed the entire difference between the $134k and $110k salary.

Next, factor in local taxes. California has income tax; on $134k of single
income, that's another $9,450. Texas has none. Federal taxes will also be
higher for the nominally higher SF wage.

There are other COLA factors this simple analysis doesn't even consider. But
Austin comes out far ahead on rent and income tax alone.

[0]: [https://sf.curbed.com/2017/6/20/15841068/rent-report-
sf-2017...](https://sf.curbed.com/2017/6/20/15841068/rent-report-sf-2017-map)

[1]: [https://austin.curbed.com/2016/4/28/11532748/austin-rent-
cos...](https://austin.curbed.com/2016/4/28/11532748/austin-rent-cost-
neighborhood-map-median)

[2]: [https://smartasset.com/taxes/california-tax-
calculator](https://smartasset.com/taxes/california-tax-calculator)

~~~
komaromy
If the goal is saving money in your 20s, having a 1BR is kind of absurd. You
can live in a multi-bedroom apartment/house in SF for _much_ less than that.

~~~
loeg
Having a 1BR as a young, single professional with a six figure salary isn't
totally absurd, even if you're trying to save some money. And costs in Austin
scale down with lifestyle, too.

~~~
komaromy
I don't think it's an unreasonable decision to make. It's just one of the
least productive things you can do if trying to save money.

I'm paying $1400/month for a 17.5'x10' room in a popular part of the city.
That's almost $2k/month saved by having roommates.

~~~
nilkn
Living conditions have a large impact on productivity and general mental
wellbeing. For introverts, I think there's an argument to be made that
splurging a bit on more space for yourself could lead to better performance in
many areas of life. It's hard to put a dollar figure on that. For extroverts,
this may be less true.

I feel like I should point out that in most of the country, including large
cities, it's hard to even spend $2k/month on any apartment, let alone save
that much by opting to have roommates.

~~~
liberte82
I'd agree that having roommates can be made news for a strong introvert, but I
don't think the amount of physical space you have is necessarily all that
important. It's more whether you can have time to yourself.

------
throwthisawayt
No where in the article do they mention how they factor in cost of living into
the comparison. As other commenters have pointed out, most studies naively
make a linear adjustment; i.e. if cost of living is 2x you need 2x the salary.
This makes no sense. Say your cost of living is 30k and your salary is 100k in
one city. In a 2nd City your cost of living is 60k and 180k. A rational
economic decision would be to live in City 2 since it maximizes your savings.
The linear adjustment based on cost of living only make sense if a person is
saving 0% of their salary.

The other issue is I don’t buy the 110k vs 130k difference in Austin. They are
not considering total comp in which case the delta is way bigger.

Finally, Hired is mostly used by startups and low to medium paying employers.
There is a huger salary difference at large tech firms between SF and other
cities.

What this study is really saying is “if you want to work at medium size
companies, don’t earn anything beyond a salary, and spend all of your salary
San Francisco is not worth it”.

~~~
timr
_" Say your cost of living is 30k and your salary is 100k in one city. In a
2nd City your cost of living is 60k and 180k. A rational economic decision
would be to live in City 2 since it maximizes your savings."_

This doesn't actually happen, except in the heads of naïve young dudes who
want to justify living in SF right now.

Total REAL compensation for a non-senior engineer in SF is somewhere around
$130k right now, with some Magic Stock Bux (probably worthless! maybe not!)
thrown in for fun...but those don't buy burritos. Total comp of $110k sounds
reasonable for Austin, as well. You can shift the ranges up or down based on
seniority, but the spread is about the same, and the range caps out at around
$200k in both markets for all but the most exceptional people.

In other words, the salary premium they're talking about here sounds right to
me, and a premium of $20k a year is more than consumed by the 3x difference in
rent, alone. You can perhaps justify going to SF on other grounds (career
growth, networking, etc.), but it's not purely economically rational for most
people.

~~~
shados
Yeah, it is a gold rush. It's pretty easy (relatively speaking) to make well
over 200k at a public company with some experience if you include stocks. And
some people are lured by options of startups (it's a gamble!). It's harder to
get that elsewhere. Not everyone (or most) get there, but a lot do, and even
more try.

~~~
speedplane
$200k/year is a great salary, and anyone who has it should be proud. But it's
not exactly "gold rush" money. You won't be "rich", nor will you be able to
retire at 40.

~~~
csp256
It is entirely possibly to retire at 40 earning $200k (~ $139k net). If you
spend $60k a year (I live in Sunnyvale and spend $30k a year) then you have a
savings rate of a bit over 55%. A 55% savings rate has an expected time to
financial independence of 14.5 years.

You could easily be a multimillionaire by 40 with those numbers. If you spent
as much as me it would take about 6 years.

~~~
speedplane
I don't disagree with your numbers, many people live on $30k/year by
necessity. But if you do so by choice, you'll have to give up quite a bit. You
won't be able to engage in much of the social activities that others enjoy in
your 20s and 30s. And while it's possible (even easy) to live on $30k/yr in
your early 20s, as you get towards your 30s, you'll start feeling quite a bit
of social pressure from your peers to conform to a more expensive lifestyle.

So if you're willing to buck society and sacrifice some of the best years of
your life, just to sit on a million dollars at the age of 40, then go ahead.
But if you are willing to buck society and sacrifice so many luxuries, why do
you care about money at all?

------
chis
It's weird to see articles like this not even mention the massive sampling
bias. Most Seattle devs work for Amazon or Microsoft, whereas SF is a tech hub
filled with startups and other low-paying opportunities.

~~~
acchow
Not to mention the sampling bias of people who used the Hired platform.

~~~
bgirard
And the fact they're only including base salary instead of looking at total
compensation. Bonus and (public) equity would probably skew the numbers and
thus change the conclusions drawn here.

This kind of distortion makes the Toronto market seems a lot better compared
to SF because it's not common to receive a large equity grant in Toronto.

------
syllogism
This is plainly an advertorial...There's no way to trust the methods, data or
conclusions, no matter how "truthy" it may or may not sound.

~~~
cpncrunch
The link to their study isn't working any more
([https://hired.com/state_of_salaries_2017](https://hired.com/state_of_salaries_2017)).

~~~
yissachar
Looks like they somehow converted the hyphens to underscores:
[https://hired.com/state-of-salaries-2017](https://hired.com/state-of-
salaries-2017)

------
sidlls
I am very close to the 110 Austin/198 SF profile.

I'll take putting ~15% of my unadjusted SF income away in savings over the
same rate for the (downward) adjustment I'd get in Austin.

Not to mention all the extra opportunities and wider variety of projects to
work on and the cultural variety.

If I were living in Austin, reading this article would make me think, "If SF
Companies can pay $134,000 why am I selling myself short for $110,000."

~~~
chank
Nobody in Austin is thinking that. Living in Austin, I wouldn't even consider
SF for $134,000.

~~~
sidlls
That isn't what I meant. I wouldn't consider SF for $134k, either. But someone
getting $110k in Austin should be wondering why they aren't getting $134k in
Austin instead. They're basically leaving $2k a month on the table because of
some absurd adherence to regional pay scales.

~~~
cmurf
A regional variation isn't absurd. If someone offered me a job in SF, I'd
insist on at least 20% more to try and counter the 50% higher cost of living.

~~~
sidlls
It is absurd. The value of an engineer's work doesn't magically adjust
downward because of the circumstance of his or her location.

Why aren't you insisting on that 20% bump now instead of leaving it on the
table and reinforcing the existing inequity?

~~~
rayiner
The price of an engineer's labor isn't determined solely by the value of her
work. It's a function of supply and demand. Demand is driven, in part, by
value. But supply is driven, in part, by cost of living. In other words, if
more people were willing to endure San Francisco's cost of living, supply
would be higher and prices (salaries) would come down.

~~~
itronitron
salaries would come down and cost of housing would go up which begs the
question... why are people that live and work in SF trying to bring more
people in? (maybe because they already own the property)

~~~
sidlls
I'd prefer that people who don't live in SF stay there and argue for better
wages where they live. It's selfish: it would help me, indirectly.

------
cletus
So I guess it's interesting to look at salary in terms of the local cost of
living but that's actually pretty meaningless. The reason is you don't have to
live "average". This is the strategy many employ. Do their time, save a lot of
money and leave.

I come from Australia. I live in Manhattan. The amount of money I can save
here is now than I can earn in Australia. It's just ridiculous how much better
it is.

Also I think just is the real winner for this strategy. For one you don't need
a car here. That saves you on buying a car, gas, maintenance, insurance,
tickets, damage, parking and so on. Plus you can actually live in decent
places for much less than anywhere in the Bay Area, like Jackson heights.

I mean Austin isn't bad either but you need a car there.

~~~
Domenic_S
I promise you're spending as much on MTA passes as someone in Austin does on a
modest car.

~~~
crazygringo
$121 for a monthly unlimited MTA pass.

How on _earth_ do you spend only $121/month on a modest car, including gas,
insurance and depreciation? I'm pretty sure that's not possible.

~~~
s0rce
Maybe possible if you live in a low cost of living place, have good insurance
record and a old crappy car, own your car and rarely drive but it would be
close.

~~~
vorotato
or the car is paid off and you're just paying depreciation and gas

------
Kinnard
This contrasts with other research—

"Does it Make Sense for Programmers to Move to the Bay Area?":

[https://triplebyte.com/blog/does-it-make-sense-for-
programme...](https://triplebyte.com/blog/does-it-make-sense-for-programmers-
to-move-to-the-bay-area)

~~~
sjg007
The 15k benefit by triple byte (live in SF) conflicts with the 50k premium by
Indeed if living in Austin.

------
abalone
Obviously, it’s a stunted metric. Cost of living handicaps don’t factor in the
quality of life that bigger, more diverse cities have to offer. It’s more than
just the cost of “rent, transportation, and groceries.” Some people value that
and others don’t and that’s fine. But don’t pretend it’s an absolute,
universal metric. I know plenty of people who moved out of SF only to lament
what they’re missing and in several cases, move back.

------
dimva
As an engineer living in SF, I agree that it doesn't really make sense for the
average software developer to live here.

But, if you are top 10-20% (not necessarily a superstar), it's definitely the
place to be. Whether you want to work at startup or a big company, the pay
vastly exceeds the extra cost of living.

At a startup, you actually have the chance to make lots of money in an
acquisition or IPO. In other places, you really don't. I used to live in NYC.
There's tumblr, mongodb, and zocdoc, all in the $1 billion range, which only
makes the founders and a few early employees rich. Foursquare was really hot
for awhile, but ended up disappointing. Rapgenius imploded. Betaworks
companies either stagnated or outright failed. I know tons of great people who
got jobs at the hottest companies in NYC at the time and ended up with
nothing. In SF/bay area, there's uber, facebook, google, palantir, airbnb,
twitter, linkedin, pinterest, lyft, stripe, square, etc, etc, etc. All of
these recently started companies are worth billions, and have created or will
create lots of millionaires. More importantly, I don't remember any big
disappointments in bay area companies, besides maybe dropbox. Almost every hot
company from 5 years ago is now worth a lot more money. It's fairly easy to
select which startup to work for if you want to optimize for equity payout.
Today, I would probably pick flexport.

At a big company, you get to work on the most interesting projects. The top
executives for all the biggest tech companies are here, so all the best
projects are going to be here as well. And the pay is very good - I don't know
any senior engineers making less than $300,000 a year, including people who
are just a few years out of grad school.

In both cases, you get to work on the most interesting technology. For
example, there are no self-driving car companies in other areas (besides
Pittsburgh). The most successful blockchain businesses (coinbase, ripple) are
here. The companies that have to deal with the biggest scale are here (google,
facebook).

Personally, I more than doubled my already-high pay in NYC by moving to SF.
Not moving here earlier was a big career mistake - I would have worked on far
more interesting projects with much more competent coworkers and I would have
been able to retire by now.

Everyone I know who moved from NYC to SF before me is now a multi-millionaire,
because they got a job at stripe, palantir, pinterest, or some small companies
that managed to get acquired for a large amount of money.

------
bonniemuffin
This article doesn't seem to mention non-salary compensation like stock
options and RSUs, which can form a pretty large fraction of total
compensation, and might vary wildly between locales.

------
pfarnsworth
L5 Google engineers are getting $800k RSU packages over 4 years. Netflix pays
their senior engineers > $400k/yr straight cash. I have a friend with 8 years
experience getting $200k/yr base at Facebook and 125k/yr in RSUs.

Sure, exactly 50% of the engineers in SF make below average salaries, but the
top 50% are doing phenomenally well.

~~~
chrisco255
Netflix, Google, and Facebook would be in the top 10% if not 1% of all
software developer jobs in terms of compensation.

~~~
pfarnsworth
They are also one of the largest employers in the Bay Area, with tens of
thousands of engineers in total. So they represent quite a large number of
engineers and large percentage of Bay Area employment. Plus LinkedIn, Apple,
Amazon, etc all strive to have equitable pay as well. It's not just 1% of the
engineers that make this.

------
scurvy
LA (at least in the places you'd want to live) is no longer cheaper than SF.
This data set is flawed.

~~~
seanmcdirmid
No, Nice places in SF are still a bit more expensive than nice places in LA
(and Santa Monica of course). They both have been getting more expensive, but
the difference is still there.

~~~
scurvy
You need a car in LA, not SF so there's the cost of car ownership. Venice and
Santa Monica have skyrocketed the past 3 years due to Snap. $9500/mo for a 2BR
at 4th and Rose? Happening location, but that's much higher than SF.

[https://twitter.com/chiropractic/status/926191351430971392](https://twitter.com/chiropractic/status/926191351430971392)

Housing costs are probably equal now or within a percent or two.

~~~
seanmcdirmid
Most of Santa Monica isn’t that bad, and even Venice can be reasonable away
from the water. There are plenty of places in SF that exceed high end places
in LA for rent, and they are similar or greater in area to boot. Let’s at
least compare apples to apples.

It isn’t just SNAP, google is big in Venice as well. Many tech startups are in
the west of LA. I just don’t a year in Westwood. It was pricey, but not SF
pricey. And ya, you need a car, which is also true for much of the Bay Area.
(Well, we didn’t need a car until we had a kid, Uber + bus worked well enough
before child car seats became an issue)

~~~
scurvy
I'd hardly call 4th and Rose "high-end" though. That was kind of my point.
Even the periphery, fringe places are coming up to SF levels.

------
jwatte
They probably just multiplied cost of living straight up. Of course it doesn't
work like that. If you live 20% below your "maximum means" then you can sock
away a lot more money in the higher cost markets. Also, certain expenses, like
cars, 401ks, and student loan payments are fixed cost and thus their relative
percentage grows in cheaper/lower salary areas.

So, anyone saying "adjusted for cost of living" needs to also cough up
methodology details, or the comparison is impossible.

~~~
balls187
Do people own cars in San Fran?

You pretty much need to in Austin.

~~~
santaclaus
31% of San Franciscans are car free [1].

In 2015, at least, over 50% of trips in San Francisco were made without a
personal car [2].

[1]
[https://en.wikipedia.org/wiki/List_of_U.S._cities_with_most_...](https://en.wikipedia.org/wiki/List_of_U.S._cities_with_most_households_without_a_car)
[2] [https://sf.streetsblog.org/2015/02/03/new-data-shows-most-
tr...](https://sf.streetsblog.org/2015/02/03/new-data-shows-most-trips-in-sf-
are-made-without-a-private-automobile/)

------
xor1
I'm very jealous of my friends with SF jobs who work remote and live with
their parents. I know three who do this, they're all late 20s/early 30s. I
totally would do it if I had the opportunity, I still get along great with my
folks.

I also know 1 person with a remote SF job in the midwest who lives like a
king.

------
pmoriarty
And yet "we have a shortage of engineers".

~~~
loeg
We only have a shortage of engineers willing to work for really cheap. It's
just another way of complaining that tech employees are expensive.

------
s17n
Tl;dr: they took an ad for Hired.com and made it into an article. There's no
methodology or data reported.

