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Tech workers find high salaries, costs on the coasts

According to a new survey, techies interested in upping their disposable income should avoid Silicon Valley and head for Texas.

Go south, young techie.

Technophiles interested in maximizing their discretionary income should avoid techie meccas in Silicon Valley or Silicon Alley and instead head for Texas, home of the armadillo and George W. Bush.

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Where Tech's @: Austin
That's the conclusion of a controversial survey of affordability by Techies.com, which combined data on the average technology worker's salary and the cost of living for more than two dozen U.S. cities. The most affordable town for technology workers: Austin, followed by Dallas and Houston.

No surprise to anyone living on the coasts, the least affordable regions are New York City and the San Francisco Bay Area, where average salaries are highest but exorbitant real estate obliterates disposable income. San Diego, Boston, Los Angeles and Washington, D.C., rounded out the list of least-affordable places.

The first-of-its-kind survey, released exclusively to CNET News.com, uses detailed salary information from more than 570,000 workers who filled out questionnaires at Techies.com. Workers run the gamut from technical writers and telephone call-center operators to senior vice presidents and chief technology officers.

Although they didn't dispute the survey?s statistical accuracy, tech workers and recruiters fiercely debated its meaning.

Some saw it as proof that Silicon Valley's clout is fizzling, as high housing costs create an exodus of talented techies who aren't fortunate enough to become stock-option millionaires. Others complained that the list doesn't take into consideration nonfinancial, quality-of-life issues such as climate and cultural attractions, not to mention career concerns such as networking and the availability of jobs.

Doug Berg, "chief techie" and founder of Minneapolis-based Techies.com, admitted that the survey doesn't attempt to rank cities by hard-to-quantify parameters such as weather and school systems. (For that, techies can rely on online calculators that weigh quality-of-life issues, ranging from crime to the availability of Major League Baseball.)

Besides, Berg said, financial concerns are often more pressing for technology workers than for other professionals. One reason: Many techies spend thousands of their own dollars on dedicated T1 lines, high-end computers and gadgets. As a result, they often have a smaller percentage of income available for housing than other people with the same salary.

"The cost of living is one thing. The cost of working is another," Berg said. "As a technology professional, you feel you need to have the same sandbox in your house as in your office...Those can be incredibly expensive lifestyle enhancements."

Techies.com found that the average Bay Area tech worker makes $67,280 per year--the highest in the nation. According to Dallas-based M/PF Research, the average one-bedroom apartment in San Francisco is $1,967 per month, which would leave the average techie with $43,676 before taxes.

Paycheck blues
Technology employees earn above-average salaries, but many of the jobs are located in expensive regions.
Region Average salary * Affordability index **
New York $66,700 50
S.F. Bay Area 67,280 72
San Diego 56,260 77
Boston 62,640 79
Los Angeles 60,320 82
D.C. 60,320 84
Pittsburgh 53,360 85
Sacramento 55,680 85
Salt Lake City 47,560 85
Philadelphia 59,740 85
Miami 55,680 87
Kansas City 48,880 88
Chicago 64,960 91
Detroit 59,160 92
Portland 59,740 92
Phoenix 55,100 93
Cincinnati 53,360 93
Columbus 55,680 96
Raleigh/Durham 56,840 97
Denver 60,900 97
Seattle 59,160 98
Atlanta 59,740 100
Minneapolis/St. Paul 60,900 100
Houston 58,080 105
Dallas 61,480 106
Austin 60,320 106
* Includes all tech-related jobs.
** A low number indicates that the salaries fall short of matching living expenses compared with other regions.

Source: Techies.com
But if this worker earned the Minneapolis average of $60,900 and rented a middle-of-the-road apartment there for $900, he or she would have $50,100 remaining. The extra $6,424 could buy the top-of-the-line version of Apple's new G4 Cube and the 22-inch flat-screen cinema display--or a shopping cart full of Palm handhelds and even a Razor scooter or two.

Spending cash would be even scarcer in New York, where the average techie salary is $66,700 but the average one-bedroom apartment runs about $2,100 per month (in Manhattan).

The relative wealth could tempt many techies to consider job offers in affordable places such as Atlanta, Denver and even Seattle.

Cost is only one of the reasons that Bill Butler, a senior software engineer at Dallas-based ComSpace, doesn't want to relocate. He works five miles from his office and has an 8-minute commute--and he wants nothing to do with the conjested highways of the Bay Area or the packed subways of New York.

He understands the appeal of densely populated cities such as New York and San Francisco, but he said he would hate to raise his family there. He would only consider moving there if an employer were willing to double his salary--and even then it would be a tough sell.

"I think they would attract the young and single that are willing to sacrifice on living space for the reward of sun and surf," Butler said. "But honestly those areas do not interest me at this point in my life."

Several experts agreed that technology workers no longer feel pulled to either coast. The increasing popularity of telecommuting and the phenomenon of the freelance consultant, who may lead projects in far-flung towns throughout the week and then return home for the weekend, has allowed many people to work far from tech hubs.

In addition, dramatic increases in housing costs--especially in Silicon Valley--have soured many techies.

M/PF Research determined that rents in Santa Clara County--Silicon Valley's epicenter and home of Apple Computer, Intel and Cisco Systems--shot up 32.40 percent in the past year. That's almost three times faster than any other rental market outside the Bay Area. The largest increase outside of Silicon Valley was in the Washington, D.C., area, where rents jumped 11.3 percent.

The situation is even worse for home buyers. According to data released in August by the California Association of Realtors, the median price of an existing single-family home in Santa Clara County was $547,000, a 33 percent jump from July 1999.

"Coming up with the down payment and monthly mortgage for a million-dollar home is a problem if you really want to buy a house," said Ilya Talman, president of Chicago-based technology recruitment firm Roy Talman & Associates. "The only attraction (to Silicon Valley) for technology workers is that you're at the center of your world. They think that that gives them more access to stock options that will make them gazillionaires.

"If you want to be a revolutionary, the Silicon Valley is great," Talman said. "But if you want a quality of life and family, it's not good."

But many tech workers said the coasts remain powerful magnets. The survey's creator, who lives and works in Minneapolis, admitted that Silicon Valley has potent psychological sway for the tech crowd.

"We had a guy who said he was leaving to take a job in the Valley. All of our techies got wide-eyed and said, 'Wow, you?re going to San Francisco and you?re on the inside track!'" Berg said. "It?s like being an actor in L.A. or a country singer in Nashville. The idea is, 'If I can make it there, I can make it anywhere.'"

Many people, especially those who live in the least affordable cities on the Techies.com index, said they try to overlook housing prices in favor of less-quantifiable factors.

Michael Mocioiu, a Web engineer for San Francisco-based finance company Charles Schwab, came to the Bay Area from Canada to learn about online stock trading and to enjoy the temperate weather, which he called "the best in the world." The city's bustling nightlife, espresso-charged café scene and proximity to national forests also are draws.

"It is true that the Bay Area has a high cost of living, but on the other hand the salaries are much higher than anywhere else," Mocioiu said. "I would not consider relocation to other parts of the United States. I just love this place too much."

Another concern about living outside of techie meccas: Young people trying to get a foothold in the industry might diminish their chances of climbing the corporate ladder and getting fat raises by staying too long in places such as Columbus, Ohio, recruiters said.

If the conventional wisdom is true--that the biggest salary boosts come from switching jobs--techies who live in areas where jobs are sparse might be doing a disservice to their salaries, they said.

"If you're not willing to travel and you live in Indianapolis, you're really limited," said John Bongiorno, CEO of MyRecruiter.com, a New York-based staffing firm that specializes in Internet jobs. "I have people now who live in upstate New York and they say, 'I really want to stay in the Kingston area.' I just shrug and say good luck. You've just got to look where the venture-capital money goes."

Regardless of its usefulness, the Techies.com affordability index may symbolize an important shift in the technology work force.

Anne Gregor, editorial director and executive producer of Los Angeles-based CareerPath.com, said the fact that someone bothered to do the survey is important: It shows that maturing techies are starting to care more about affordability issues. The change is especially apparent in the e-commerce niche, which was born roughly five years ago when new companies began experimenting with online sales, she said.

"When you're 23 and fresh out of college, you joined a dot-com and worked for little pay and the glory of stock options, putting in long work weeks and living with three other people in an apartment," Gregor said. "But now...they're thinking about those dreaded middle-class things: children, mortgages and schools. The basic blocks of their lives are different."