Google Is Tops for Software Engineer Salaries
mashable.com
mashable.com
Adjusted for cost of living, $107,798 in San Francisco is equivalent to $71,100 in Minneapolis:
http://www.wolframalpha.com/input/?i=%24107%2C797+in+san+fra...
What matters is the amount of cash you're left with after you pay the actual cost of living. In this model, 20k/y raise is a 20k/y raise wherever you live, assuming you've already got the monthly balance positive. Of course it's still not the perfect metric but still much better than this bullshit.
It might be true for large populaces, or big city areas, but the difference between say, Memphis, TN and Annapolis, MD is huge.
I got a 200% pay increase when I moved, only to find that the majority of it is consumed by the housing difference.
That means you were grossly underpaid and could likely get 2x increase just by changing employer and staying in Memphis.
It's also worth noting that I switched career paths at the same time and moved from a strictly engineering role to an enterprise architecture role.
Was it hard to find enterprise architecture position in Memphis?
With that, I decided to refocus my job search and someone I'd known years prior hired me on for a security-clearance required position in the federal government at a job I'd never done (but which he thought I was qualified for). Because of the customer, my contacts, and the cost of livings increases, I was paid a salary well above the "2012 average base salary" for a Google engineer per the linked article. Before that, I had made something like $60k.
Except for some very specialized positions (SAP, EMC, etc.) in Memphis, I don't know of any engineers making much above $100,000 (though indeed $100,000 in Memphis is a very respectable salary.)
Since leaving, I've had a number of Memphis-based employers trying to buy me back into the area, but the discussion generally dies when we get into money as, at least from my anecdotal experience, wages just aren't that high around there, and the only large paying employers are those who have successfully commoditized the market (FedEx, International Paper, etc.) and aren't hiring 'rockstars'.
In summation, while I'm sure there are people making what I make or above in my field in Memphis, it is by no means as common as a six figure salary in the valley, or bay area, or in places where there are large IT-based firms that are competing for talent. Even if there were, I wouldn't really have been qualified at the time - at least mentally, having taken a job I didn't feel qualified for and making absolutely damn certain I performed well at it made for interesting times, but ultimately boosted my overall confidence a million-fold.
Edit: I would also be remiss to add that at least amongst my peers, colleagues and family, I was doing fairly well. A lot of that had to do with the TN cost of living.
In 5 years from now, your buddy Joe is making ~127.6k, you are making ~89.3k. Joe has gained 8.3k more than you GAINED, (which is greater than the difference you pay in rent) So now Joe clears ~75k/year (after tax and rent), and you are clearing ~54.7k. The gap is only going to get bigger from there as time goes on, that's only after 5 years. You've GOT to think of money in terms of percentages, not just hard dollar values, or it's going to bite you.
There's life outside of Palo Alto and SoMa.
I agree that telecommute could be the right choice. But then SF vs Minneapolis comparison is getting meaningless.
I guess I am really just trying to stress the fact that people all too often see money from a liner point of view, when in fact it can be advantageous to explore the exponential growth side of money as well. That's all I really want to get out there. It's a balance between basing decisions on the known present or the unknown future.
Rent typically goes up every year, so the amount you're saving versus renting increases annually, and at the end of the "limited time" you're not paying a mortgage at all.
That only helps if your raise percentage exceeds inflation. Otherwise, you could actually find yourself worse off. e.g:
$100K earnings + 2%
$50K living + 3%
--------------------
$59,756K after living expenses after 30 years.
$70K earnings + 2%
$20K living + 3%
--------------------
$77,177 after living expenses after 30 years. $70K + 5% [1]
$50K living + 3%
-----------
$2.5M saved after 30 years [2]
$70K for life
$20K living + 3%
-----------
$2.7M saved after 30 years
[1] For the first 15 years, whereafter you suggest it could plateau (at around $140K, in this case, which doesn't seem unreasonable given the current market and historic income increases)
[2] Assumes all non-living expense allocated income is invested at 5%.
Sounds like you have never worked for a large defense contractor. The "standard" raise given to ~70% of the engineers last year (my last review cycle working for that company) was 2.1%.
http://cgi.money.cnn.com/tools/costofliving/costofliving.htm...
107,798 in SF would be 73,278 in Minneapolis
One has to distinguish cost of living for a non-saver from cost-of-living for a saver.
Look, as someone said elsewhere, this is an impossible problem. You have too many factors to figure out. Have a family? Want to own a house instead of rent? Do you need a car? What lifestyle do you maintain?
The point here is that we're trying to assess what it would cost to maintain a similar standard of living in two different cities. Food. Transportation costs. Housing. Rents. Healthcare. Forget 52" TVs and trips to Paris for the time being.
>> what it would cost to maintain a similar standard of living in two different cities.
Someone who saves $20k/year or spends large amounts on travel would have a much higher standard of living in SF than Minneapolis.
"I have a wife and two kids. I want to own a 3 bedroom house with a yard. I need a car, and I drive 15,000 miles a year. We eat <x> number of meals at home each week, and <y> at restaurants. We do <z> things as a family including movies. This takes up 80% of our net income."
Okay, now what would that cost in Minneapolis, and what would that cost in San Francisco? That's all we're trying to ask.
At both Sun and NetApp where I was familiar with the compensation practices there was a 'modifier' applied to bay area jobs which increased their compensation, but even with the modifier the 'net' take home pay was less than it was elsewhere.
That said, when I was at Google they had a really interesting pay practice for engineers which consists of a base salary and a 'bonus', the bonus was affected by a personal multiplier and a company multiplier. The system was designed to make it impossible to figure out what the multipliers were so basically is simplified to the old fashion 'tweak the folks we like' non-accountability that you got elsewhere but it certainly gave the impression to people that they were going to earn more money than they actually did. (And yes, it annoyed me, but Lazlo Bock the VP of HR didn't really care that it did :-) Perhaps when they did that whole 10% across the board thing they normalized things a bit (which would have been a good thing, the old system was causing good people to quit when it should have been rewarding them)
The CoL calculators, as they're usually implemented, make the most sense for people with no real disposable income beyond living expenses, but they don't make a lot of sense for Google-level salaries.
Yes. This was my point.
> you shouldn't adjust for CoL any parts of your salary that will be spent on trips/vacations, or on nationally priced consumer goods.
Indeed, the real comparison of salaries should take into account what you plan to do with the income above the CoL. To the above I would also add that the interest on the rest of your cash stash (you don't plan to spend all of it on LCDs and trips?) is pretty much independent of where you live.
Anyone from CA want to chime on what state income and sales taxes are compared to the rest of the country?
Notice how the salary adjustment jives with the CNN calculator too, this is because the cola takes into account the things that people need to spend their salary on, if you buy a vw microbus and sleep in the office parking lot every night and have minimal dining needs then you will notice an absolute difference between regions, otherwise you won't, the salary variance is eaten by the cost of all he usual things people do.
I'm a google person, moving from one side of the country (Maryland) to the other (Mountain View), and the price differences are hilarious.
Income taxes are roughly the same in both states (~10%), but for the price of a 2500 sq ft house in the Bay Area, I could get a 4000 sq ft house with gold plated bathtubs in Maryland/Virginia. In turn, the property taxes will also be double or triple what I pay now (~5k) because of the high housing prices.
Of course, the traffic is actually significantly better in the bay area than in DC, so i could live farther away and have less of a commute, but still.
Sure, rent is expensive. That's about it, and even then if you're willing to live in the right part of Jersey you can still be 30 minutes from work and have very cheap rent.
Most big ticket items are the same. Anything ordered from Amazon is the same. Laptops, tablets, sound systems - the same. Tons of clothing deals all over the city. Food is actually cheaper because there are so many little farmer markets and dollar stores. I understand that if you just go by what some people are paying for a hamburger, you could think that NYC is much more expensive, but you don't have to eat at the same place i-bankers and tourists eat! A street gyro cost $4 and there's $1 slices of pizza.
Finally, even if the cost of living is higher, it's not a comparable product. You are paying not only to have a place to sleep, but you are also paying to live in New York City, one of the most exciting cities in the world with endless amounts of diverse people, places, and activities. Paying higher rent so that you can live in the city many people dream about makes sense, and the fact that salaries are largely adjusted to make this a reasonable proposition makes it an easy choice.
On one hand you put your finger on it. Your life in place A is completely different then your life in place B so trying to so that you are paying x% more per sqft and therefore you arre y% poorer is obviously nonsense. Same goes for inflation calculators. This week you spent your money on iPads, international foods, air travel, divorce lawyers and antidepressants. 200 years ago you could have taken that money and bought this many slaves, that much bread and a weekly leaching. Therefore $1 in 1804 is worth $349 in todays money.
On the other hand there obviously is such a thing as inflation over time and cost of living variances. You can tell because you can live in a house, eat food and drive a car with a certain amount of money in one place but you can't pay for a the smallest apartment in another place with the same amount.
The only things that are cheaper in NYC are international flights (and only because you don't have to pay for connections) and immigrant labor (such as apartment cleaning). Other than that, to say that anything in NYC is cheaper than Maryland is just plain untrue.
And all this "willing to live in the right place in New Jersey" so you can have a 30 minute commute is propaganda. What it really means is, ghetto-living with an hour and a half commute, and that's only if you work 10 hour days because the commute around 9-to-5 is actually 2 hours. I've done it, and it's not worth it. (Unless of course, you are actually poor and simply have to).
Working 10 hour days and commuting 3 more is work+sleep, not living. Yes, you have your weekends, but when you are in NJ, let's face it, you miss out on all the spontaneous things that people do, which is the whole reason you've moved to NYC in the first place.
No, it's really true. The right place is Jersey City near one of the PATH subway stations, particularly Journal Square. That really is under 30 minutes from either the downtown or midtown commercial areas of Manhattan, and hardly ghetto at all. Other options are Union City or North Bergen along one of the many bus lines into Manhattan 42nd street. Or Hoboken a bit more upscale but still significantly cheaper than Manhattan.
I've lived in these areas of New Jersey and commuted to Manhattan for my entire professional life. It really is the best solution for a Manhattan commute. You don't need a car if within PATH subway range. Weekend access to NY is still just as easy. Grocery stores abound, both big chain and ethnic speciality. NJ sales tax is a bit less than NY, and you dodge the NYC income tax.
It's unclear if you meant you actually lived in NJ yourself. Did you, and where and what commute?
Sure, rent is expensive. That's about it, and even then if you're willing to live in the right part of Jersey you can still be 30 minutes from work and have very cheap rent.
Very cheap rent is not available until your commute gets well outside of 1 hour on a good day. Which means an hour and a half on a real day. The bus/non-Path rail system is an abomination. The wait times are unpredictable, the buses regularly miss their scheduled route (meaning you wait an hour for the next one), and the drivers hate and routinely abuse the passengers.
If you want a specific example, I've lived in Teaneck NJ for under a year. People like to say that it's 15 minutes from NYC - which is true, if you have a car and make the drive at 1am on a Tuesday (plus you have to figure in around $30 for parking). At a reasonable hour and no car, it takes an hour and a half, plus the bus wait time. And Teaneck is not cheap, merely cheaper than NYC. But you still won't find much under a $1,500 a month. Of course, you must add the monthly bus pass at ~$150.
This calculator takes into account more, like housing, food etc: http://www.bestplaces.net/col/?salary=107798%20&city1=50...
"A salary of $107,798 in San Francisco, California could decrease to $56,716 in Minneapolis, Minnesota"
Which is much more in line with my personal experience having worked in both Silicon Valley and Minneapolis.
If you're a good engineer, it is not uncommon to pull down 107k or more in Minneapolis as well.
With kids - it's better live in a provincial suburb, have big house with nice backyard while working for 30% smaller salary.
In my experience, the higher salaries are easily available. I've been consistently offered much more than $70k and the recruiters are desperate. So I'd say the job market in Minneapolis is actually quite hot - it's the talent that doesn't take advantage of it.
So there's that too.
You can offer anything you want, but it would have to be ridiculous to get my wife to move away from her family.
Think of it this way: people want to live in desirable places even if they have jobs that don't adjust for cost of living.
Has this changed or was I misinformed? A bump of $13k in a single year does, of course, seem quite significant.
I think the outside population has a skewed view of what the technology looks like in a typical hedge fund due to all the stories about highly technical funds.
Many hedge funds dont' have that great of computer technology and the technology that they have is applied to back office processing rather than trading. In these types of firms, which I'd say make up the majority of funds, tech is viewed like marketing would be viewed in a techology company, a necessary evil but not a core part of the team.
Most funds buy their technology and build out to fill the missing pieces.
Some funds do build out sophisticated tech, and in these funds tech is valued and paid accordingly, but they are not the majority of funds.
The idea being that you put your money where your mouth is. If you're good you get paid via year end bonus, otherwise you leave the industry:)
And I would rather be an engineer 2 at $150k than an engineer 3 or associate VP at $100k
Salary postings are link bait for the most part.
edit: I ask because my starting salary at MS is surprising close to the number they have listed as "base salary". I can't tell if base pay growth is small there or if this information is simply inaccurate.
As a hiring manager, human resources also paid for Serious Surveys (i.e., not just relying on the people who enter their info into a random website) of salaries for comparable jobs at other places. Of course, that was probably superfluous, as the HR and recruiting people swap between the big tech firms pretty frequently (seemingly moreso than engineers), so for the cost of a trip to the cafeteria starbucks, you could usually get info on comparable salaries from a recent transfer.