1

Does it mean "that's what they can save after paying for everything"?

Although Silicon Valley is not short of high-paying technology jobs, when adjusted for cost of living, the relative value of the earned salary is far from impressive. Among the seven metros studied, San Francisco’s average technology salary ranks third at $93,171 after this adjustment, while San Jose ranks fourth at $92,577. Both are left behind by Seattle and Austin at over $97,000 a year.

Source: http://www.marketwatch.com/story/is-san-francisco-losing-its-technology-talent-to-other-cities-2017-04-17

  • 1
    No, it refers to the adjustment for cost of living "when adjusted for cost of living". When you consider the cost of living in SJ area, the high salaries do not go as far as some other areas (how much money you have left after rent, utilities, food and other fixed expenses). – user3169 Apr 18 '17 at 5:29
  • So is $93,171 the money they have left after rent, utilities, food and other fixed expenses? – haile Apr 18 '17 at 5:32
  • No, that is the total earnings of the individual. Then, after deducting those expenses, they will have less money left over than with the same situation in other areas. Meaning while salaries in other areas are lower, lower expenses mean they will have more money left over. – user3169 Apr 18 '17 at 5:37
1

"after this adjustment" refers to the salary after a cost-of-living adjustment has been carried out on it. It is still a "salary", it is not the same as "income after all expenses".

Someone has carried out an "adjustment" to the salaries, which, while I don't know exactly what they've done, probably means that the salaries have been changed to fit a standard cost of living. So you can see it as being the salary they would have in a place where the cost of living is "standard", that would allow them to live the same lifestyle.

The full adjustment is probably reasonably complicated, and could be done in different ways, but as a toy example we could adjust a salary to account for rent differences. It mentions that monthly rent for a one-bedroom apartment in San Francisco is $3000 a month, while the national average is $1200 a month. So to adjust for the difference in the average rent, you could decrease the salary of a San Franciscan by $1800 a month to find the equivalent salary in a place with the national average rent cost. A real-world salary of $100,000 in San Francisco would therefore be changed to a salary of $78,400 after adjustment (100,000 - 12 * 1800).

To summarise, it is the equivalent salary if you normalise to account for the difference in how much goods and services cost locally.


For info, here is the Wikipedia article on cost of living: https://en.wikipedia.org/wiki/Cost_of_living

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.