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Accounting for Cost of Living

Where Does Your Job Have the Most Buying Power?

April 1, 2021 by Luke Mason

When considering compensation data, it’s important to factor in the cost of living (COL)

Salaries feel different depending on where you live due to housing, groceries, utilities, transportation, healthcare, and more. For example, an impressive $144,000 software engineering median salary in San Francisco yields only $86,000 in actual buying power (aka the COL-adjusted salary). That’s a whopping $58,000 difference.

Meanwhile, in Atlanta, a software engineer’s COL-adjusted salary ($112,000) is actually higher than their median salary ($106,000) because of Atlanta’s lower-than-average cost of living.

So while it’s certainly important to consider median salary when evaluating compensation, the median salary itself doesn’t tell the whole story. Jobseekers need to know how much those salaries are worth in any given location.

In response to recent discussion on this topic, we decided to look at the median salaries and COL-adjusted median salaries for some of the most popular job titles in the US. Then we’ll compare across 15 major markets to see which MSAs offer the most buying power for each job.

cost of living banner

To make an accurate assessment, we pulled from our compensation database, which includes comprehensive wage data from government sources and social profiles. When evaluating compensation data, it’s important to consider two things:

  1. Where the data comes from.
  2. If it accurately represents a salary’s true value.

Data pulled from only one source (e.g., self-reported surveys) and without COL adjustments will be inherently incomplete. Context is critical, and we believe jobseekers benefit most from complete data built on diverse sources.

Popular job titles and MSAs

For this article, we’ll look at these 10 popular job titles:

  1. Software engineer
  2. Registered nurse
  3. Business analyst
  4. Executive assistant
  5. Account manager
  6. Customer service representative
  7. Marketing manager
  8. Recruiter
  9. Data scientist
  10. Product designer

We will evaluate 15 MSAs, ranked from least expensive to most expensive based on C2ER’s Cost of Living Index. For reference, a score of 100 equals the national average.

Now let’s look at the buying power for each of these 10 job titles.

Why cost of living matters

It’s easy to look at the $144,000 median salary for a software engineer in San Francisco and think, “Wow, that’s a lot of money!” But that number doesn’t take into account how much those software engineers actually have left to spend after basic cost of living expenses in the notoriously expensive metro. This San Francisco software engineer might be better off taking their talents to Seattle, Austin, Dallas, Atlanta, or DC where the COL-adjusted median salary is still in the six figures.

Jobseekers care about what a job pays, no doubt. But they also want to know how far those dollars will go. They care about the cost of living, which plays a huge role in helping them decide where to locate themselves and their families.

As always, context is key.

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