Washington, Austin among cities outpacing Silicon Valley's tech salaries

Dive Brief:

National tech hubs are starting to boast salaries rivaling those commanded by the Silicon Valley workforce, according to Hired's 2018 technology salaries report. The average tech salary in the San Francisco Bay Area increased to $142,000 in 2017.
However, when adjusted for the cost of living in the Bay Area, Austin, TX leads the national average salary with $202,000, followed by Seattle and Los Angeles at $182,000.
The cost of living in a tech hub like the Bay Area is deterring potential hires and increasing the likelihood of relocating. About 41% of tech workers feel they are not paid fairly compared to their city's cost of living, according to the report. Seattle and Austin rank as the top two locations where workers want to relocate.

Dive Insight:

Companies across sectors are paying close attention to tech salaries, particularly as new tech hubs emerge. While tech talent used to flock to Silicon Valley, candidates can now choose to work in various U.S. cities while still commanding a premium salary.

The emergence of new tech hubs is particularly notable because of Amazon's search for a second headquarters. HQ2 will drive a flood of talent into the chosen location, creating or growing further a new tech hub. HQ2 finalists Washington D.C. and Austin, for example, are both experiencing rising tech salaries.

Washington, D.C.'s average tech salary has fluctuated by roughly $10,000 since 2015, but with its close proximity to "Data Center Valley" in Virginia, it may be a leading contender for HQ2.

Austin's tech salaries steadily increased from 2015 to 2017 by $10,000. More than 40% of Austin's workforce has college or graduate-level education, and the city has access to a workforce pipelines from nearby universities, such as the University of Texas. Other tech companies including Samsung, Dell and IBM all already call Austin home.

Seattle is effectively Silicon Valley 2.0 with the presence of tech giants like Amazon and Microsoft. However, the stresses of housing caused by Amazon's first headquarters are evident, and the market saw increases in housing costs as more people competed for limited real estate.

Housing scarcity is not the only problem that tech companies can bring to a city when they establish a headquarters or hub there. Some cities fear major tech companies coming could disrupt the way of living by pushing out lower income families.

But as more tech companies begin expanding away from the West Coast, national salaries for tech workers are sure to continue to increase.