- A high salary won't go very far when a city's goods, services, and housing prices are high, too.
- An economist from the Indeed Hiring Lab gathered salary data for similar jobs across America's biggest metros to find out which have the highest salaries after adjusting for cost of living.
- The analysis revealed that salaries go the furthest in Southern and Midwestern cities, such as Birmingham, Alabama; Cincinnati, Ohio; and Memphis, Tennessee.
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Big cities may come with big salaries, but your paycheck can shrink when you factor in cost of living.
In a new study from the Indeed Hiring Lab, chief economist Jed Kolko analyzed 185 metros across America to find out where workers' paychecks go the furthest.
Kolko used salary data from job postings on Indeed between April 2018 and April 2019 to find the average salary for similar jobs across metros. He then applied local cost-of-living data from US Bureau of Economic Analysis, which included the price of housing, services, and goods.
Kolko notes that unadjusted salary figures are highest in - you guessed it - California metros like San Jose and San Francisco. But when cost of living is factored in to arrive at the true purchasing power for the average worker, those places fall down the list.
"The ten metros with the highest adjusted salaries are all small and mid-size metros," Kolko wrote. "These aren't just odd exceptions - it's a general pattern. Unadjusted salaries are 7% higher in metros with at least two million people than in metros with fewer than 250,000 people - but salaries after adjusting for living costs are 9% lower. "
Kolko concluded: "For job seekers in most places, there's another metro with a similar mix of jobs that offers higher adjusted salaries."
Of the 50 largest metro areas by population, these are the 17 where salaries go the furthest.