> You won't be compensated at the same rates that you would be in California, but the cost of living would make up for it.
No, it generally doesn't. It depends on the specific numbers of course (how much of a salary cut, how much cheaper is the housing costs), but a lot of people make that blanket statement because of a mathematical fallacy: The fallacy is if I make half as much, but my expenses are half as much, then I'm just as well off. That statement is mathematically false.
Here's a made up example: San Francisco salary is $140K (or $84K after 40% taxes deducted) and rent or mortgage is $3000/month ($36K/year). Boise salary is half as much at $70K (or $42K after 40% taxes deducted) and rent or mortgage are also half as much at $1500/month ($18K/year). Now calculate disposable income after taxes and housing costs: In San Francisco it's $48K (i.e., $84K - $36K) and in Boise it would be $24K (i.e., $42K - $18K). Clearly, in this example, you'd still be $24K better off in San Francisco.
I know that I made many assumptions above. I'm just illustrating the fallacy that people often make. Halving your income and halving your expenses is not neutral -- it is worse.
Plus, cost of living doesn't account for everything. Most consumer products, e.g. cars, computers, shoes, and clothing, cost about the same everywhere. Living in San Francisco with a higher salary and paying a high rent, your spending on such products will be a smaller percentage of your income than if you lived somewhere with cheaper housing and made less money.
Lmfao, nothing cost about the same living in San Francisco.
Not to mention taxes are significantly higher as you earn more (progressive) and there are tons of things that nickel and dime you every day.
For example, a bottle of 200 ibuprofen in SF runs about $12-14. I buy it for $3-4. It was so surprising I started filling a bag full of non perishable items every time I'd visit family in the midwest. You add this across hundreds of things you use and it adds up quickly.
With more and more students coming out of college with debt, your student loans account for a much smaller percentage of income in a city like SF than in Boise
Parking in San Francisco is at least a second car payment. I'm not sure it actually matters that cars themselves are more affordable. And the rest is going to be trivial as a percentage of your income either way.
Housing isn’t twice as expensive in San Francisco, it is 10x. Median price per square foot is $129 in Boise, vs $1550 for Palo Alto, or $993 in SF, $1220 SOMA.
So you need to clear roughly $40K more in pre-tax salary to make up the difference between SF and Boise (accounting for both tax and rent on a studio). That seems doable.
Note that the difference is less if you didn't have a car in SF (or NYC) but need one in Boise.
It does sound doable. I'd probably put the breakeven at closer to $60k pretax for me personally, since I live in a 2bd and don't really want to downsize to a studio, though I realize some people are fine living in studio apts. Depends a lot on the job though. In my line of work (academia), I don't think you could easily get $60k more by moving from a low-CoL to a high-CoL city. From offers I know of, the salary difference is closer to $20k. Even Stanford (which isn't exactly easy to get a job at in the first place) pays only marginally more than comparable universities in low-CoL areas like Georgia Tech, CMU, or UIUC. But I'm sure you could swing a $60k+ raise in some other lines of work.
Yeah, academia is another whole can of words. Apologies if I didn't make it explicit, but I was talking about SWEs. And anecdotally I added a lot more than $60K to my salary by moving to NYC, so I'd have been fine to cover an increased CoL of up to $34K/year; in actuality, it increased by far less than that, less than $10K/year, thanks in large part to saving $600 per month after selling my car which I don't need here. Also, my current employer provides three meals a day, which saves a surprising amount of money (even if I don't eat dinner at the office everyday). That kind of perk simply wasn't available at most tech companies where I moved from.
Speaking of Stanford, one of my coworkers left to go teach there for a year and then came right back. She was actually losing net worth there because they didn't pay her enough for the area, and she didn't want to cut back on her lifestyle and live frugally like one would have to to make a future on that salary. It's sad, but there you go. Maybe there should be a tuition surcharge on CS majors to allow them to actually pay instructors enough to retain them, vs running right back to industry.
software engineer salary somewhere else is usually more like 20-25% less rather than 50% less -- someone making 140k in SF might make 110k-120k in places like Boise or Denver. They'll pay 5k less in taxes (both due to lower total income and lower state tax rates). So saving 18k in housing costs puts them at least in a comparable disposable-income range.
For people in lower-paying careers, the lower housing costs elsewhere almost always dwarf the pay differences. For higher-paying careers, the pay differences are the dominant factor. Mid-range software engineer salary is actually pretty close to the dividing line, which makes it particularly important to evaluate the specific numbers yourself.
As someone who was looking at the data on glassdoor while writing my comment, and who has dealt with offers from recruiters, and who has an extensive network of friends who are open about their earnings, I call bullshit on your calling of bullshit.
There are certainly outliers. There are certainly people with excellent skills who are being underutilized, and who will get paid a lot more if they find the exact right fit. Just a wild guess, but you didn't go from 35k in Pittsburgh to 140k in SF, you went from a lot more than that in Pittsburgh to a lot more than that in SF. If you're up in the 200k+ range in software in SF, you'd probably earn a lot less going anywhere except maybe NY or Boston. But if you're in the "average software engineer salary" range in SF, the falloff going to a mid-sized city is not nearly as steep.
> But if you're in the "average software engineer salary" range in SF, the falloff going to a mid-sized city is not nearly as steep.
But that is exactly why Engineers want to be in SF! Other markets won’t compensate you nearly as well, or increase your compensation as much, as companies in the Bay Area.
However, if one has a family and kids, I could see moving to a city with more affordable housing and good schools as a worthy trade off.
"software engineers" in SF aren't making 140k either.
If you look across several software-related job titles that are around 140k in SF (you may have to include terms like "lead" or "senior") you'll find Boise salaries to be closer to 3/4 than 1/2. Some are a little lower, some a little higher. Denver tends to be a little higher than Boise but still well below SF. Housing costs in Denver are also considerably higher than Boise and considerably lower than SF.
Which goes back to my original point: that it's particularly important for people in that approximate salary range to run the numbers for themselves and their own situations. While for people making a lot more the higher salary easily dwarfs the CoL and for people making a lot less the CoL easily dwarfs the salary, for people making not-particularly-exceptional salaries within the general software field, the numbers are similar enough that the specific offer + your specific housing need + other personal details can make the difference.
Your own data contradicts your argument. Assuming you're using Glassdoor as a reference like you mentioned, than Boise engineers make $85k and SF engineers make $145k - I am not filtering by title for either of those.
My anecdotal experience is engineers in SF make more than $140k, and engineers in Pittsburgh make less than $85k (although this is probably no longer true with all of the self-driving startups there now). I would suspect engineers in Boise make less than Pittsburgh, but I've never talked to anyone there.
> "Boise engineers make $85k and SF engineers make $145k"
if you click on the Boise link you provided and change the city to SF without making any other changes, it shows about $125k, not $145k. 145 is if you add "senior" to the title.
I haven't checked Pittsburgh, and I'm not trying to make an exhaustive list. Just making a more general point -- run the numbers for yourself, based on your specific offers and your specific needs. Because you might find that you personally can make >140k in SF and <85k in Pittsburgh and won't come close to making that up from taxes and CoL. Someone else might find they can make 140k in SF and 120k in some other city and easily make up the difference through taxes and CoL.
> software engineer salary somewhere else is usually more like 20-25% less rather than 50% less -- someone making 140k in SF might make 110k-120k in places like Boise or Denver.
Worth pointing out that this function doesn't work for inputs much higher than $150k or so, and doesn't even work at points like $140k depending on the particular candidate.
No, it generally doesn't. It depends on the specific numbers of course (how much of a salary cut, how much cheaper is the housing costs), but a lot of people make that blanket statement because of a mathematical fallacy: The fallacy is if I make half as much, but my expenses are half as much, then I'm just as well off. That statement is mathematically false.
Here's a made up example: San Francisco salary is $140K (or $84K after 40% taxes deducted) and rent or mortgage is $3000/month ($36K/year). Boise salary is half as much at $70K (or $42K after 40% taxes deducted) and rent or mortgage are also half as much at $1500/month ($18K/year). Now calculate disposable income after taxes and housing costs: In San Francisco it's $48K (i.e., $84K - $36K) and in Boise it would be $24K (i.e., $42K - $18K). Clearly, in this example, you'd still be $24K better off in San Francisco.
I know that I made many assumptions above. I'm just illustrating the fallacy that people often make. Halving your income and halving your expenses is not neutral -- it is worse.