Software Developer Career Tips: The Big Three.

Date: 2019-11-18

Time to Read: 11 Minutes

Tags:

Comments

Photo By: Oakie

Disclaimer: Tupelo, MS is used as the base case for cost-of-living comparison purposes because (1) it’s near my current location therefore I have a certain amount of familiarity with it and (2) most locations are both more expensive and pay less than Tupelo, MS therefore keeping the statistical direction consistent. The $50,000 average salary for a software developer for Tupelo, MS is a rough estimate from my own experience as the number of reported salaries for the location are too little to be a trustworthy source. I use NerdWallet’s Cost of Living Calculator for estimating the Cost of Living differences between locations and estimating the median rent/home prices for a 2 bedroom apartment and 3 bedroom, 2 bathroom house, respectively. The estimated average salaries are gathered from Glassdoor using the VERY generic job title of Software Developer, I know many will anecdotally claim higher salaries but I’m trying to keep the sources of my information consistent across all locations.


First, let’s look at what I would call the Big 3 (The Big X label seems to be a trend in these posts) or the three major tech hubs in the US that are commonly mentioned by software developers and other assorted IT workers. This includes the San Francisco Bay Area (which I will group neighboring communities such as Oakland, San Jose, Mountain View, Palo Alto,  and Cupertino), the Seattle Area (Seattle, Redmond), and New York City.

San Francisco/Bay Area/San Jose (Silicon Valley), California

For starters, the average salary for a Software Developer in the San Francisco area is ~$106,000 according to Glassdoor with reported salaries ranging $80,000 - $141,000, with the larger and more prominent technology companies boasting the highest salaries. Unfortunately, with the high salaries come incredibly high housing costs such as a staggering $1.7m median house price[1] and if buying isn’t an option then median rent prices for single bedroom apartments can range from $2,300 to $3,900 (and over $4,200 for two bedrooms)[2]. Using NerdWallet’s Cost Of Living Calculator and comparing Tupelo, MS and San Francisco, CA, San Francisco is roughly 150% more expensive (485% more expensive housing costs at $4,323 vs. $720 median rent and $1.3m vs. $233k median home price) [3]. That $106k salary in San Francisco, CA roughly translates to a sobering $42k in Tupelo, MS.

Now there are some caveats to these metrics. We are comparing Tupelo, MS which is LCOL (Low Cost of Living) vs. San Francisco, CA which is extremely HCOL (High Cost of Living). Many of the companies in the Bay Area include stock options as part of their total compensation package which can increase its value significantly (hence why many employees separate their total compensation and base compensation when disclosing their compensation).

As of July 2019, the area has populated spots 2 (San Francisco), 6 (Oakland), and 7 (San Jose) of the nation’s most expensive cities according to Investopedia.[4] With that said, according to Glassdoor, the salaries for Junior/Senior and simply just Software Developer positions are roughly ~33% higher than the national average for the same roles. The aptly named Silicon Valley is home to Facebook, Apple, Netflix, Google, and many other smaller (relatively speaking) technology companies, unicorns, and smaller startups. Even the technology companies which aren’t necessarily headquartered in Silicon Valley have some presence in one form or another in the area. Two of the top universities for Computer Science (Stanford and UC-Berkeley) feed new talent into the valley every year. The location is, unquestionably as of 2019, the epicenter of the technology gold rush.

Unfortunately, this leads to a common criticism given by inhabitants of this area; the myopic focus on technology that leads to a lack of diversity in industry and culture; everyone is programmer, everyone works for a start-up or technology company. However, the positive to this negative aspect is the ease-of-career mobility for technology workers given the prevalence of technology companies in the area.

The cost-of-living, extremely expensive housing costs, and increasing issues regarding the homeless population has lead many to question the viability of raising a family in the area. A popular tract that appeals to a lot of newer graduates heading to Silicon Valley is to live with multiple roommates as to distribute the high rent price (or live in an even more minimalist manner e.g., van life), save as much of their high income as possible for as long as possible before escaping to a lower cost-of-living area where their savings can be stretched much further; effectively retiring early, working on a remote basis, or simply just joining a smaller, regional technology-oriented company in that area. Another thing to consider is the high state income taxes that can impact your overall earnings as well.[5] Also, located in Northern California, San Francisco’s cooler climate and foggier conditions may negatively affect those who prefer much warmer climates.

But if you’re looking to start a technology company or to become a part of the founding team of a start-up, the close proximity to venture capitalists and notable incubators is unmatched. Oh yeah, apparently the dating scene for single straight men is fairly limited, so there’s that.

Seattle/Redmond, Washington

In the Seattle, WA area, the average salary for a Software Developer is ~$98,000 (23% higher than the national average) according to Glassdoor with salaries ranging from $74,000 - $131,000. With a median rent of $2,642 for a 2-bedroom apartment and a median 3BR/2BA home price of ~$813,000, Seattle WA is only 244% more expensive than our comparison city of Tupelo, MS; bringing Seattle, WA as a whole to roughly 93% more expensive than Tupelo, MS. Therefore, the average salary of $98,000 in Seattle, WA translates to $50,000 in Tupelo, MS.[5]

Speaking of state income tax, Washington state has none as of 2019[6]. The Seattle/Redmond area in recent years has been the destination for a lot of developers seeking to escape the rising cost-of-living and other previously mentioned negative aspects of Silicon Valley. And for good reason, the area is home to the two large technology companies, Amazon and Microsoft and an assortment of smaller technology companies such as Expedia, Zillow, RedFin, and Tableau. However, as the technology scene began to flourish in Seattle and the Greater Seattle Area, the housing prices and homeless problems began to rise as well.

Located in the Pacific Northwest, the climate in the area can range from great to dreary and depressing leading to many people to supplement Vitamin D[7]. However, when the weather is relatively nice, outdoorsy activities such as hiking become incredibly popular (Google the North Cascades).  Another phenomenon reported by those who live in the area is the reported “Seattle Freeze”. Basically, people appear to be very impersonal and avoid starting conversations and forming friendly relationships[8]. For nightlife, areas such as Capital Hill and Belltown come heavily recommended.

The Bay Area and Seattle area are arguably the two most popular technology hubs located on the west coast.

New York City, New York

On the east coast is New York City, the capital of the world, so to speak. Using Glassdoor again, the average salary for a Software Developer is ~$90,000 (or 14% higher than the national average) with a median rent of $5,133 for a 2-bedroom apartment and a median home price of $2m. Housing costs in Manhattan (the most expensive borough) is 698% more expensive than Tupelo, MS and the cost-of-living is 200% higher.[9] The combination of high state income taxes and high city taxes has lead many to commute from nearby Jersey City rather than live in NYC proper.  The average salary of $90,000 in Manhattan translates to ~$30,000 in Tupelo, MS; with $90,000 in Brooklyn and Queens translating to $39,600 and $48,500 in Tupelo, MS respectively, ouch.

With New York City being the most expensive city in the nation, you would imagine that their average salary for a Software Developer would be much higher than simply 14% higher than the national average. My fairly uninformed theory regarding this number is that there are many non-tech oriented companies in the city that are underpaying their software developers relative to the cost of living of the city and other larger companies.

At one point in 2018, New York City was announced as the location for Amazon’s second headquarters before they abandoned those original plans in early 2019 and eventually decided to move it to Arlington, Virginia. Though many of the larger technology companies are not directly headquartered in the city, companies like Google, Facebook, and Netflix have a significant presence in the metropolitan area. Compared to both San Francisco and Seattle, which both are at least a fair bit myopic in their industries, New York City boasts a fairly large and diverse industry advertising jobs for software developers. In addition to the aforementioned technology companies, New York City is home to IBM, and offices for Adobe, Slack, Square, Twitter, and Salesforce.

With its close proximity to Wall Street, New York City is home to many proprietary trading shops and high frequency trading firms such as Jane Street, Two Sigma, Renaissance Technologies, D.E. Shaw, and Hudson River Trading and bigger financial and media corporations such as Bloomberg, Morgan Stanley, Goldman Sachs, Barclays, and JP Morgan Chase. So if you’re a fan of financial technology or quantitative analysis and trading software then New York City has plenty of opportunities for you to take advantage of. However, securing a job at a company such as Jane Street or Renaissance Technology is incredibly difficult. And though stock options may not be a part of (or a significant part of) the compensation package, rumors that the annual bonuses are quite significant.

As for living in or close-to New York City, it may take some adjustment to get acclimated to the pace, population, and attitude if you’re from a smaller town or more rural region. Given the diverse cultures present within the city, there is no shortage of entertainment and dining options nearby if you’re able to afford it; but green space can be pretty limited. The winters can be fairly harsh while the summers are typically pretty mild. As for dating, the ratio of genders is much more balanced than somewhere like San Francisco. Though similar to San Francisco, the high housing costs can limit your options to sharing your living space with roommates.

In closing,

Which place is better? It, as always, depends on your place in life and your preferences. If you’re young and starting out in your career than any of the above options would be more than ideal. If you’re a straight single male who values a well populated dating pool then New York City likely has more options than San Francisco and even Seattle. If you live and breathe technology and you’re seeking the most technology-oriented job opportunities nearby for career mobility than San Francisco, Seattle, and then New York City would be preferable in that order. Do you really enjoy nature, outdoorsy activities, and don’t mind rainy overcast days the majority of the year then Seattle would be preferable.  Though, Yosemite and Lake Tahoe isn’t that far from San Francisco. If you prefer a diverse setting with multiple cultures and industries then New York City is ideal. Moderate sunny weather with limited rain and a fair bit of fog? San Francisco. Are you married with children? Probably Seattle due to the lower cost of living.

You can kinda see a pattern here. And it may appear that the high cost-of-living simply cancels out the high salaries advertised at these locations. But that’s not necessarily true, in most cases in these companies located in these technology hubs, the ceiling is much, much higher in terms of compensation than similar roles in some LCOL location like Tupelo, MS.

Next up, I’ll discuss some secondary and growing technology hubs.

Here is some comparative information tabulated.

Location Median Rent Median Housing Costs COL % Housing Costs % Average Salary National Average Tupelo Equivalent
Tupelo, MS $720 $233k 0% 0% $50k -37.5% $50k
San Francisco, CA $4,232 $1.3m 150% 485% $106.5k 33% $42.5k
Seattle, WA $2,642 $813k 93% 244% $98.3k 23% $50k
New York City, NY $5,133 $2m 200% 698% $90.8k 14% $30.2k

[1] - https://sf.curbed.com/2019/7/10/20689307/median-home-price-house-sf-san-francisco-2019

[2] - https://sf.curbed.com/2019/10/2/20895578/san-francisco-median-rents-market-census-september-2019

[3] - https://www.nerdwallet.com/cost-of-living-calculator/compare/san-francisco-ca-vs-tupelo-ms

[4] - https://www.investopedia.com/articles/personal-finance/080916/top-10-most-expensive-cities-us.asp

[5] - https://www.nerdwallet.com/cost-of-living-calculator/compare/seattle-wa-vs-tupelo-ms

[6] - https://turbotax.intuit.com/tax-tips/fun-facts/states-with-the-highest-and-lowest-taxes/L6HPAVqSF

[7] - https://rightasrain.uwmedicine.org/well/prevention/do-you-need-vitamin-d-supplement

[8] - https://www.seattletimes.com/life/lifestyle/seattle-freeze-forget-making-friends-half-of-washington-residents-dont-even-want-to-talk-to-you/

[9] - https://www.nerdwallet.com/cost-of-living-calculator/compare/new-york-manhattan-ny-vs-tupelo-ms

Software Developer Career Tips

12 February, 2020
A collection of posts detailing much of the information that I've learned in recent years when considering a significant career move.
View All 15 Posts
Like what you read? Don't? Discuss it.

About

Blake Adams is a writer, software developer, technical consultant, and financial independence enthusiast living in Oxford, MS.

Latest Posts

Software Developer Career Tips: Closing Thoughts

12 February, 2020

Read More...

Fitness Series: Illnesses and Injuries, Make a Contingency Plan

03 February, 2020

Read More...

Software Developer Career Tips: The System Design Phase

27 January, 2020

Read More...

Software Developer Career Tips: The Technical Phase

21 January, 2020

Read More...

Software Developer Career Tips: Do Your Preliminary Research

13 January, 2020

Read More...

Latest Booknotes

The Power of Habit

19 December, 2019

Read My Highlights in 9 Minutes

Rich Dad Poor Dad

14 October, 2019

Read My Highlights in 10 Minutes

Atomic Habits

19 August, 2019

Read My Highlights in 16 Minutes