|
Where you live affects how much you are paid
-- most of us have been aware of that for a long time. But a new study
quantifies pay difference based on geography. A job that demands a salary
of $30,000 nationally can pay as little as $27,180 in Birmingham, Ala., or
as much as $36,780 in San Francisco, according to the 2004 Geographic
Salary Differentials from Mercer Human Resource Consulting. This
represents a pay variation of 32 percentage points from 9.4% below the
national median to 22.6% above.
2004 Geographic Salary
Differentials for Select US Cities
(For a job with median
national salary of $30,000) |
|
City |
2004 Area Median |
Variance from National Median |
|
San Francisco, CA |
$36,780 |
22.6% |
|
San Jose, CA |
$36,720 |
22.4% |
|
New York, NY |
$35,790 |
19.3% |
|
Los Angeles, CA |
$34,110 |
13.7% |
|
Boston, MA |
$33,150 |
10.5% |
|
Chicago, IL |
$33,120 |
10.4% |
|
Washington, DC |
$32,640 |
8.8% |
|
Seattle, WA |
$32,100 |
7.0% |
|
Philadelphia, PA |
$31,830 |
6.1% |
|
Detroit, MI |
$31,680 |
5.6% |
|
Dallas, TX |
$31,590 |
5.3% |
|
Denver, CO |
$31,410 |
4.7% |
|
Baltimore, MD |
$31,410 |
4.7% |
|
Atlanta, GA |
$31,260 |
4.2% |
|
Houston, TX |
$31,230 |
4.1% |
|
Charlotte, NC |
$31,140 |
3.8% |
|
Minneapolis, MN |
$30,780 |
2.6% |
|
Las Vegas, NV |
$30,120 |
0.4% |
|
Portland, OR |
$30,000 |
0.0% |
|
Indianapolis, IN |
$29,850 |
0.5% |
|
Richmond, VA |
$29,850 |
0.5% |
|
Kansas City, MO |
$29,820 |
0.6% |
|
St. Louis, MO |
$29,790 |
0.7% |
|
Cleveland, OH |
$29,700 |
1.0% |
|
Pittsburgh, PA |
$29,610 |
1.3% |
|
Miami, FL |
$29,610 |
1.3% |
|
Milwaukee, WI |
$29,340 |
2.2% |
|
Phoenix, AZ |
$29,220 |
2.6% |
|
Louisville, KY |
$28,710 |
4.3% |
|
New Orleans, LA |
$28,590 |
4.7% |
|
Memphis, TN |
$28,200 |
6.0% |
|
Omaha, NE |
$28,140 |
6.2% |
|
Asheville, NC |
$28,010 |
6.4% |
|
Little Rock, AR |
$27,810 |
7.3% |
|
Buffalo, NY |
$27,690 |
7.7% |
|
Mobile, AL |
$27,420 |
8.6% |
|
Albuquerque, NM |
$27,210 |
9.3% |
|
Birmingham, AL |
$27,180 |
9.4% |
Each year, Mercers study compares local pay rates for more than 175
cities to national medians at different pay levels. The 2004 findings
suggest that geographic pay variations are less pronounced, but still
evident, at higher pay levels. For a job with a median salary of $60,000
nationally, pay varies from a low of $54,480 (9.2%) in Little Rock, Ark.,
to a high of $71,040 (+18.4%) in San Francisco, for a variation of nearly
28 percentage points.
Even at $90,000, there are still pay
variations by geography. Cities like Buffalo, N.Y., Albuquerque, N.M., and
Omaha, Neb., represent the lower end of the pay range at $84,690, $85,320,
and $85,410, respectively. Meanwhile, cities like San Francisco, San Jose,
and New York hold the top spots at $103,410, $103,230, and $103,050,
respectively. Among the cities in Mercers study, the pay variance at this
salary level is about 21 percentage points.
Mercers geographic analysis highlights the
challenges faced by large employers with employees in multiple locations
throughout the US. Sensitive compensation issues can arise when an
employee moves from a relatively high-salary area to a relatively
low-salary area, or vice versa. Good information on salary variances helps
employers handle these situations in a fair and consistent manner.
According to Darrell Cira, a senior
compensation consultant in Mercers Philadelphia office, a review of
Mercers survey data over the past four years clearly indicates that
salaries are growing at different rates around the country.
While salaries in some locations, such as
Denver, Colo., have remained consistent over the past four years
(approximately 4.5% above the national median), salaries in other
locations have moved either closer to or farther from the national median,
says Mr. Cira. For example, salaries in Washington, D.C., and Seattle,
Wash., have increased several percentage points faster than the national
median, while salaries in Buffalo, N.Y. and Portland, Ore. have grown
several percentage points slower.
Geographic Salary
Differentials over a Four-Year Period for Select US Cities
(For a job with median
national salary of $30,000) |
|
City |
Median/Variance |
|
2001 |
2002 |
2003 |
2004 |
|
San Francisco,
CA |
$35,820 |
19.4% |
$36,570 |
21.9% |
$36,870 |
22.9% |
$36,780 |
22.6% |
|
San Jose,
CA |
$36,390 |
21.3% |
$36,840 |
22.8% |
$36,630 |
22.1% |
$36,720 |
22.4% |
|
New York,
NY |
$35,670 |
18.9% |
$35,910 |
19.7% |
$36,060 |
20.2% |
$35,790 |
19.3% |
|
Washington,
DC |
$31,410 |
4.7% |
$31,680 |
5.6% |
$32,010 |
6.7% |
$32,640 |
8.8% |
|
Seattle,
WA |
$31,392 |
4.6% |
$31,590 |
5.3% |
$31,950 |
6.5% |
$32,100 |
7.0% |
|
Philadelphia,
PA |
$31,422 |
4.7% |
$31,560 |
5.2% |
$31,740 |
5.8% |
$31,830 |
6.1% |
|
Dallas,
TX |
$30,150 |
0.5% |
$30,420 |
1.4% |
$31,170 |
3.9% |
$31,590 |
5.3% |
|
Denver,
CO |
$31,290 |
4.3% |
$31,470 |
4.9% |
$31,290 |
4.3% |
$31,410 |
4.7% |
|
Baltimore,
MD |
$30,781 |
2.6% |
$31,050 |
3.5% |
$31,110 |
3.7% |
$31,410 |
4.7% |
|
Las Vegas,
NV |
$30,450 |
1.5% |
$30,300 |
1.0% |
$30,150 |
0.5% |
$30,120 |
0.4% |
|
Portland,
OR |
$30,810 |
2.7% |
$30,690 |
2.3% |
$30,570 |
1.9% |
$30,000 |
0.0% |
|
Indianapolis,
IN |
$30,172 |
0.6% |
$29,370 |
2.1% |
$29,580 |
1.4% |
$29,850 |
0.5% |
|
Kansas City,
MO |
$29,610 |
1.3% |
$29,310 |
2.3% |
$29,430 |
1.9% |
$29,820 |
0.6% |
|
Pittsburgh,
PA |
$30,390 |
1.3% |
$29,850 |
0.5% |
$29,820 |
0.6% |
$29,610 |
1.3% |
|
Milwaukee,
WI |
$29,160 |
2.8% |
$29,190 |
2.7% |
$29,130 |
2.9% |
$29,340 |
2.2% |
|
Louisville,
KY |
$28,860 |
3.8% |
$28,980 |
3.4% |
$28,770 |
4.1% |
$28,710 |
4.3% |
|
Buffalo,
NY |
$29,070 |
3.1% |
$28,380 |
5.4% |
$28,110 |
6.3% |
$27,690 |
7.7% |
|
Birmingham,
AL |
$26,920 |
10.3% |
$26,820 |
10.6% |
$26,850 |
10.5% |
$27,180 |
9.4% |
Were seeing a differential shift in pay relative to the national market
that is undoubtedly a result of supply and demand factors in the
geography, explains
Mr.
Cira. Although our study does not
identify these local factors, it supports what many hiring managers in
these geographies have been saying over the past few years and reinforces
the importance of vigilance and year-over-year monitoring of pay levels.
Organizations that have not looked at their local pay scales in the past
four or five years should review them to make sure salaries and salary
scales are still competitive. |
