Photographer: David Paul Morris/Bloomberg

Why San Francisco Isn't the Best Place to Be an Engineer

The pay packages Bay Area companies offer are less impressive when you factor in lifestyle and the cost of living.

Pulling a solid team of engineers together may be harder in San Francisco than it is in other cities, a new study shows.

Companies can afford to hire more engineers in such cities as Atlanta, Chicago, and Austin, Texas, than in coastal tech hubs such as San Francisco and New York, according to a report from Hired, a job search website. What's more, because of the high cost of living in San Francisco, those Midwestern and Southern engineers will feel better compensated. Hired reviewed data from 80,000 job offers made through its site at 3,000 companies in 2015 and found that Atlanta, Chicago, and Austin businesses can afford to add roughly three more engineers to their teams on a $1 million annual engineering budget, the report finds.

Engineer salaries in the San Francisco Bay Area may appear wildly impressive, but that's not the whole picture, said Mehul Patel, Hired's chief executive officer. "When you factor in the cost of living and other lifestyle aspects, engineers in San Francisco may be getting paid more there, but they take home significantly less than in other areas of the country," he said. 

One place to consider, the data show, is Seattle. "Seattle has a prominent technology scene, but the cost of living is significantly lower than the Bay Area and even Los Angeles," said Patel. "Plus, there are no income taxes, and it's relatively close to other big cities." In Seattle, the average engineer makes $125,000 compared with the Bay Area's $132,000. When adjusted for lifestyle and living expenses, however, engineers in Seattle have salaries that are $32,000 to $164,000 higher than those of their Bay Area counterparts.

If you're a software engineer willing to trade an ocean for a lake, you'd have even more net pay to play with in Austin or Denver. The average salaries for engineers in those cities are $116,000 and $110,000, respectively. But factoring in the lower cost of living, engineers are making the equivalent of $180,000 and $195,000 in San Francisco.

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The one place that's even worse than San Francisco for earning a living as a software engineer is New York City. The data show that, controlling for living costs, engineers in New York take home slightly less than they do in San Francisco. If they had limited their analysis to Manhattan, said Patel, the gap would have been even bigger. "There's just not a lot of tech companies in New York compared to San Francisco, so companies are paying [fewer] people higher salaries to keep up with how expensive it is to live in this city," said Patel.

Nonetheless, there's something to be said for the cultural pull of cities such as New York and San Francisco. When I told a software engineer colleague he could essentially double his salary by relocating, his response was, "But then I'd have to live in Atlanta."

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