Seattle and Austin are totally comparable, even preferable, to NYC and SF in many ways. So yes, all else equal, why not save an extra 10% of your income?
What I get from that is "The cost of living in Austin, TX is 26.4% lower than in San Jose, CA" and "Employers in Austin, TX typically pay 20.9% less than employers in San Francisco, CA." Pretend I make exactly $100k here and pay 33% tax. Moving to Austin costs me $14k in net income (0.209 * 0.67 * 100000), so my living expenses here would have to be at least $53k (14000 / 0.264) just to break even by reducing them.
But that would mean I'd been spending over 79% of my net income just in living expenses, which to me sounds too precariously balanced to be sustainable. In reality I make somewhat more and save half of it, so I'd barely come out ahead if my rent in Austin dropped to $0.
A lot of the cost of living calculations are wrong. I had moved from LA paying 1400$ a month rent to Austin and paid nearly the same rent in Austin for a one bedroom. the plus is no income tax but food costs are more and property taxes are double California.
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.
Cost of living is only relevant compared to the salary you make and SV can pay very well. Quality of life wise most of the SV is a giant suburb so if you like suburbs it's about the same as anywhere else.
Having lived in Silicon Valley, Seattle and Austin, my estimation is that the amount of money required for a family to live the same lifestyle (owning similar level home, access to good schools, reasonable commute, etc.) in Austin as in Silicon Valley / SF is at least 2x. I'd estimate the differential to be significantly less for someone single or DINK.
I have a much different cost of living equation supporting my decision to live in the bay.
The big expense is obviously rent, which I'm sure they have represented... The average 1 bedroom in Austin around $1,000 and in SF let's say $3,300. Difference of $2,300 * 12 = $27,600. After that, that other $40,000 cost of living difference seems a bit of a stretch.
In SF, my company buys breakfast, lunch, dinner and my transportation to/from work (like many others in this area) so I don't have to factor that into my cost of living. The difference between cost of living adjusted salary tilts toward the SF bay, especially with bay area equity options over what is competitive in Austin (I have no insight into that, I think that would be an interesting study though).
A lot of the cost of living calculations are wrong. I had moved from LA paying 1400$ a month rent to Austin and paid nearly the same rent in Austin for a one bedroom. The plus is no income tax in Washington and Texas but food costs are more and property taxes are double in Texas when compared to California.
Where are the 80k$-120k$ offers coming from, geographically? The reason I ask is that 80k in S.F. is roughly... 50k in Austin, TX. 120k in S.F. is roughly equivalent to 70k in Austin. (Based on Salary.com's cost of living calculator.) 50-70k is probably a nice starting salary in Austin, but not exactly mind-blowing, imho.
The idea that New York cost of living is much higher is just false. You can sacrifice a bit of space and maybe the location and pay the same amount as you’re paying now.
This seems objectively false. By definition, if it costs more to buy the same size apartment, then the cost of living (vis a vis housing) is higher. Yes, you can downsize and accept having to live with roommates to get by, but that doesn't mean the cost of living isn't higher.
According to a cost of living comparison between Austin, TX (where I live) and NYC, you would need to make 140k in NYC to match 90k in Austin:
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”.
Whenever I look at cost of living comparison it doesn't seem advantageous to me to be in SV unless you get lucky on equity ( how do you even measure that? ).
$150k in Dallas is something like $265k in San Francisco. And I would think in SF your housing would be pitiful compared to the midwest at $3k/month mortgage.
Engineers at my company can make upwards of $300k in Dallas and that gives a standard of living thats comparable to making $1m in the valley which is probably pretty rare.
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