The Geography of High-Paying Jobs

Last week, I posted on a Bureau of Labor Statistics (BLS) report on the metro regions with the highest-paying jobs in nine major occupations. But this report only listed the top two regions in each category. So I decided to take a closer look at the underlying BLS data to compile a more comprehensive mapping of regional pay. With the help of my colleague, Charlotta Mellander, we looked at the pay levels for three types of jobs - high-skill, high-pay, creative class jobs; traditional, blue-collar, working class jobs; and lower-skill, lower-pay service jobs.

The first map (above) shows the distribution of pay levels across all U.S. metro regions. The highest-paying metro pays more than double the lowest-paying one ($66,780 vs. $30,670). In fact, there are roughly two dozen metros which have half the pay level of the highest-paying region. That highest-paying region is San Jose ($66,780), followed by nearby San Francisco ($61,940). Greater Washington, D.C. is third ($60,090), followed by Greater Boston ($58,330), the Boston suburb of Framingham ($57,660), Bridgeport-Stamford, Connecticut ($57,340), Bethesda, Maryland, a suburb of D.C. ($56,900), Greater New York ($56,250), Trenton-Ewing, New Jersey ($55,590), and Oakland, California ($54,590). Lowell, Massachusetts ($54,110), Boulder ($53,640), Seattle ($53,240), Newark-Union, New Jersey ($52,760), Hartford, Connecticut ($51,520), Durham, North Carolina ($50,480), Edison, New Jersey ($50,350), Nassau-Suffolk, New York ($50,190), and Anchorage, Alaska ($49,730) are all among the top-20 highest-paying U.S. metros.

The second map (above) shows the geography of pay for creative class jobs - that is, jobs in science, technology, and engineering; business, management, and law; health care and education; and arts, culture, design, media, and entertainment. The highest-paying region in the United States is San Jose (Silicon Valley), where the average creative class wage is $101,575. Greater San Francisco is next with an average wage of $95,472, followed by Greater New York ($90,101), Greater Washington, D.C. ($89,712), Bridgeport-Stamford ($87,747), Greater Boston ($86,681), Bethesda, Maryland ($86,485), Framingham, Massachusetts ($85,344), Napa, California ($84,959), and Oakland, California ($84,069). Four of the top 10 metros are in and around the Bay Area; two of the top 10 are in Greater Washington, D.C., and another two are in Greater Boston.

The third map (above) shows distribution of pay for service jobs. These are lower-skill jobs in occupations like home health care aid, personal care aid, food preparation, retail sales, and office and clerical work. Even at the top end of the scale, they pay less than half of knowledge, professional, and creative work.

Interestingly, many of the same regions make this list. The metro with the highest-paying service jobs is Bridgeport-Stamford ($40,935), San Francisco is third ($39,822), San Jose, fourth ($39,469), Greater New York, fifth ($38,514), Greater Boston, sixth ($38,409), Framingham, seventh ($37,289), and Oakland, ninth ($37,149). Hanford, California ($40,594), Trenton, New Jersey ($37,169), and Seattle ($36,393) round out the top 10.

The fourth map shows the geography of pay for blue-collar work in manufacturing, construction, and transportation and moving occupations. Two Alaska metros top the list - Fairbanks ($52,247) and Anchorage ($50,785). But, here again, we find some of the same metros - San Francisco in third place ($47,757), Oakland, California in fifth ($45,087), Seattle, sixth ($44,765), Greater New York, eighth ($44,583), and Greater Boston, tenth ($44,031). Bremerton, Washington ($46,762), Honolulu ($44,706), and Nassau-Suffolk, New York ($44,214) round out the top 10.

The geography of high-paying jobs is strikingly uniform. The highest-paying regions are bi-coastal - dominated by metros in the Bay Area and the Bos-Wash corridor. And the pattern holds not just for the highest-paying metros but for all U.S. metros. Pay levels for the three major occupational groups are closely correlated across the U.S. regions. Creative class pay is closely correlated with both service class pay (.86) and working class pay (.67); and service class and working class pay are also closely correlated (.74). This likely reflects regional differences in housing prices and other living costs as well as other structural characteristics of these regions such as human capital, demographic characteristics, and overall productivity. That said, it's important for policymakers as well as for analysts to take into account the systematic geographic differences in pay across U.S. regions. But the striking fact is that a small number of U.S. regions pay considerably more than others for virtually every type of work.