Coding JohnsonLondon, New York, San Francisco & deceptive wages
San Francisco, Silicon Valley, New York, London et al... it's often boasted that these are the hottest startup locations on the planet and therefore they attract the best talent on the planet. But it's also no secret that these locations also have some of the highest living costs on the planet too, just recently there was an article in VentureBeat describing the recent absurdity of living costs in SF, similarly it's common knowledge in the UK that living in London costs on average 25% more than the average UK living costs.
So it seems to me that if a top company wants to attract the top talent then they'll have to make it worth their while (financially) - you could argue that it's all about the experience and the journey of working in a top tech environment, doing shit that matters. But for the sake of simplicity I'm going to say that money is the primary motivator for people to choose a job.
Given the high living costs in SF and the average salary being quoted as $100,000 in SF - it seemed to me there's some disparity between cost-of-living and average-salary, so I decided to put my money where my mouth is and compare some top locations for developers:
| Location | Average $ | Cost of Living Index | SF Income $ |
|---|---|---|---|
| San Francisco | 117000.00 | 1 | 117000.00 |
| New York | 109000.00 | 1.11 x more expensive than SF | 98200.00 |
| London | 77935.00 | 1.08 x more expensive than SF | 72162.00 |
I got my salary figures from Indeed and ItJobsWatch for "Developer". I got my living expenses figures from Numbeo. All figures are normalised to USD using Google currency converter as of 22 Aug 2013
I'm no data-scientist, so bare with me. The Cost of Living Index is basically how expensive is it to live somewhere in camparison to San Francisco, so I'm using San Francisco as the baseline (that's why SF is at 1). SF Income is just the Average $ divided by the Cost of Living Index to give a representation of how much you're earning for your quality of life compared to San Francisco. It's probably not going to stand up under scrutiny but I'm just using it as a rule of thumb.
Just to recap - the grid is showing that you can live in London, earn $77,935 - but have a quality of life comparable to someone in San Francisco earning $72,162 - but it's not a perfect match.
The results seem pretty conclusive so far, if you live and work in London - you're going to get a raw deal - whereas if you live and work in SF then life's gonna be pretty awesome. My curiosity didn't end there though, I cooked up a script to automate this for the whole of the US, by state, here's the result.
| Location | Average $ | Cost of Living Index | SF Income $ |
|---|---|---|---|
| Illinois | 98000.00 | 0.54 | 181480.00 |
| Georgia | 102000.00 | 0.62 | 164520.00 |
| Kansas | 81000.00 | 0.51 | 158820.00 |
| Alabama | 91000.00 | 0.58 | 156900.00 |
| Missouri | 89000.00 | 0.57 | 156140.00 |
| Iowa | 87000.00 | 0.56 | 155360.00 |
| Indiana | 88000.00 | 0.57 | 154390.00 |
| Wisconsin | 81000.00 | 0.53 | 152830.00 |
| Arkansas | 87000.00 | 0.57 | 152630.00 |
| Michigan | 90000.00 | 0.6 | 150000.00 |
| New Hampshire | 89000.00 | 0.6 | 148330.00 |
| North Carolina | 90000.00 | 0.61 | 147540.00 |
| Oklahoma | 83000.00 | 0.58 | 143100.00 |
| Mississippi | 100000.00 | 0.7 | 142860.00 |
| New Jersey | 97000.00 | 0.69 | 140580.00 |
| Ohio | 87000.00 | 0.62 | 140320.00 |
| New Mexico | 81000.00 | 0.58 | 139660.00 |
| California | 99000.00 | 0.71 | 139440.00 |
| Maryland | 93000.00 | 0.68 | 136760.00 |
| Connecticut | 101000.00 | 0.74 | 136490.00 |
| Nevada | 79000.00 | 0.58 | 136210.00 |
| West Virginia | 88000.00 | 0.66 | 133330.00 |
| Oregon | 85000.00 | 0.64 | 132810.00 |
| Tennessee | 85000.00 | 0.64 | 132810.00 |
| Arizona | 78000.00 | 0.59 | 132200.00 |
| Vermont | 83000.00 | 0.63 | 131750.00 |
| Kentucky | 77000.00 | 0.6 | 128330.00 |
| Texas | 87000.00 | 0.68 | 127940.00 |
| South Carolina | 84000.00 | 0.66 | 127270.00 |
| Montana | 87000.00 | 0.7 | 124290.00 |
| Louisiana | 77000.00 | 0.62 | 124190.00 |
| Virginia | 91000.00 | 0.74 | 122970.00 |
| North Dakota | 82000.00 | 0.67 | 122390.00 |
| Utah | 73000.00 | 0.6 | 121670.00 |
| Nebraska | 69000.00 | 0.57 | 121050.00 |
| Maine | 78000.00 | 0.66 | 118180.00 |
| South Dakota | 68000.00 | 0.58 | 117240.00 |
| San Francisco | 117000.00 | 1 | 117000.00 |
| Idaho | 64000.00 | 0.55 | 116360.00 |
| Colorado | 80000.00 | 0.69 | 115940.00 |
| Massachusetts | 106000.00 | 0.94 | 112770.00 |
| Rhode Island | 87000.00 | 0.78 | 111540.00 |
| Washington | 88000.00 | 0.81 | 108.640.00 |
| Pennsylvania | 84000.00 | 0.78 | 107690.00 |
| Minnesota | 80000.00 | 0.76 | 105260.00 |
| Florida | 86000.00 | 0.84 | 102380.00 |
| Delaware | 83000.00 | 0.82 | 101220.00 |
| New York | 109000.00 | 1.11 | 98200.00 |
| Alaska | 73000.00 | 0.83 | 87950.00 |
| London | 77935.00 | 1.08 | 72162.00 |
| Hawaii | 61000.00 | 0.98 | 62240.00 |
I had to miss out Wyoming since there wasn't enough data. Stats aren't for the entire state but for the largest city in that state in an effort to give a fair comparison to city living in SF, that's why California is different to SF (because the largest city is LA).
What have I proven?
I could maybe say that you can live in Illinois as an average developer and live life like a resident of SF with an income of $181,000, or I could say that if you live anywhere in the top 50% of states then for an average developer your quality of life is going to be at least twice as good as the average developer in Hawaii. But like I said earlier, these figures shouldn't be taken 100% literally.
If was going to prove a point with this data, I would say that SF salaries need to go upwards to attract the best talent. Since, if the best talent is any good at maths, they've probably worked out the difference of cost-of-living themselves and figured out it's probably not worth the move. Similarly, I could say the same for Britain - London salaries when weighed up against the cost of living are not the strongest (see below).
If I was to look to the future - I'd say that these areas could suffer from a talent shortage if the local cost-of-living continues to increase. I could be wrong, it could be likely that people live and work outside of those popular locations to get themselves the necessary skills and then move to those popular locations once they get a high enough offer - but I think that's unlikely since labor mobility is decreasing.
Meanwhile, in the UK
| Location | Average | Cost of Living Index | SF Income |
|---|---|---|---|
| Leicester | $54603.50 (£35000) | 0.43 | $126984.89 (£81395.35) |
| Bolton | $58503.75 (£37500) | 0.47 | $124476.06 (£79787.23) |
| Birmingham | $58503.75 (£37500) | 0.48 | $121882.81 (£78125.00) |
| Stoke-on-Trent | $59283.80 (£38000) | 0.49 | $120987.35 (£77551.02) |
| Preston | $54603.50 (£35000) | 0.47 | $116177.67 (£74468.09) |
| Leeds | $53043.40 (£34000) | 0.46 | $115311.73 (£73913.04) |
| Liverpool | $50703.25 (£32500) | 0.46 | $110224.45 (£70652.17) |
| Manchester | $54603.50 (£35000) | 0.51 | $107065.68 (£68627.45) |
| Bristol | $54603.50 (£35000) | 0.58 | $94143.97 (£60344.83) |
| London | $78005.00 (£50000) | 1.08 | $72226.86 (£46296.30) |
| Sheffield | $46803.00 (£30000) | 0.7 | $66861.42 (£42857.14) |
It's safe to say that living and working in London isn't going to give you the best value for money. Additionally, I know a lot of (awesome) developers from Bolton/Preston/Manchester who would never dream of moving to London because of the difference in the cost of living. You could probably extend this reasoning to different countries too, for example, living in India costs a third of what it does in the UK - if a worker there can get a remote working job for something that approaches a UK salary then why would they ever move? They could live like a king.