Your paycheck's size can depend on your location
With wages limping along and most of America not seeing raises, you may be wondering where you could get a bigger paycheck. Or if you're just starting out, what city is best for your profession.
A report from the Hamilton Project at Brookings found place can make a huge difference in how much money you take home. Researchers discovered workers in the 30 best-paid areas earned 20 percent more than the U.S. median wage. The report looked at 420 locations and compared wages across industries and occupations.
Even within the same occupation, pay differences can be large depending on where you live. For instance, computer programmers in Santa Cruz, California, earned nearly $85,000 more than their peers in Lubbock, Texas. And the median salary for a photographer was $20,000 higher in New York than in Scottsdale, Arizona.
In other jobs, location matters less -- truck drivers showed just a $1,000 difference in earnings between Lubbock and Santa Cruz, while auto mechanics showed just a $3,000 spread between New York and Scottsdale.
In part, that's because truck drivers or auto mechanics tend to have similar skills that are transferable across the job market. On the other end of the spectrum, high-achieving producers in the same industry tend to cluster together. For example, a software developer in Silicon Valley may have a better shot at landing a lucrative job with a larger company, and a photographer in New York may have more access to the entertainment and film industry
"Given that the skill set is the same ... the combination of the mobility and same job regardless of where you are helps contribute to a really compressed wage distribution," Jay Shambaugh, director of the Hamilton Project and senior fellow in economic studies at the Brookings Institution, told CBS MoneyWatch.
Cost of living is also a factor: Higher-earning areas tended to be more expensive to live in. "You just know you can't hire someone to be your accountant for the same wage everywhere in the country because realistically it's too expensive to live in San Francisco and New York City if you're making the same wage as Topeka," Shambaugh said.
The report found that after adjusting for living costs, locations in the Midwest and Northeast delivered the highest earnings.
Interested in seeing how your job stacks up? Here's a tool the researchers created to explore wages by industry and location.
