What’s the Best City for Techies in 2024?
Have you ever wondered what the best city for technologists is post-pandemic? I moved to Austin, Texas in late 2020 from San Francisco, CA, but our move wasn’t a reaction to Covid. We had planned to move to Texas for a long time to live closer to our extended family. We now live around the corner from my in-laws and have lots of family in easy driving distance. For us, living in Austin has brought a more fulfilling lifestyle while we raise our 3 young kids.
But I frequently get asked whether Austin is a good place to live if you don’t have family here. It used to be that the best city for technologists was the Bay Area. Back in 2013 when I moved there, every other city was a distant second, third, or fourth option. But Covid reordered the world. Combined with friendly inquiries, I wanted to re-examine what the best city for techies is in the brave new world of more remote and hybrid work.
TLDR: If you care only about maximizing your technology career’s growth, the Bay Area is still the undisputed best city. But from a monetary and lifestyle perspective, I think Austin is the #2 best city in America. The #1 best city for technologists in 2024 is Seattle, Washington.
Where Are the Tech Jobs in 2024?
The remote / co-location pendulum is swinging back in favor of in-person roles in late 2023. Despite this, I think the covid-19 pandemic has opened the remote working pandora’s box. Even though companies are increasingly pushing for employees to return to offices, Gartner estimates that 48% will either be fully remote or hybrid at the end of 2023 [source]:
Tech workers in particular seem unlikely to ever return to in-person work in the same numbers as 2019 [source]. But even with the increase in fully remote work, hybrid and in-person employees still soundly outnumber full remote employees. That means that location will continue to play a key role in in people’s careers.
I’m not a fan of most “best city to live in” articles. They tend to be light on data and heavy on PR spin. I’m looking at you randstad, VentureBeat, and Indeed. For one, the Bureau of Labor Statistics (BLS) has a pretty inaccurate definition of what a “tech” worker is. That makes it easy to pad articles with seemingly-authoritative, but ultimately useless data.
I say the proof is in the pudding. Let’s go to LinkedIn and search for three common job titles in the tech industry. I chose to look for roles in software engineer, product management, and UX design. Here’s what that data looks like for the usual metro-area suspects: San Francisco Bay Area, Seattle Tacoma, New York, Los Angeles, Miami, Boston, and Austin. Note that although I refer to the cities, for this article, I’m referring to the city plus the metropolitan area.
Number of Job Listings on LinkedIn For 3 Common Tech Roles
|Software Engineer||Product Manager||UX Designer||Total Roles|
|SF Bay Area||1501||960||223||2684|
Graphing this we get the following:
The Former Best City Isn’t What It Used to Be
The above data surprised me in 3 ways:
- There’s only a 17% advantage in job postings between LA and SF. When using job postings as a measure of career opportunity, the top 5 cities are all very similar.
- The two tertiary markets I included (Austin and Miami) aren’t as far behind as I expected. For my discipline (product management), the California Bay Area has 3x more job opportunities. Across other disciplines, however, the differences are less stark.
- Several cities have more job postings than the Bay Area: Seattle, Boston, and LA. That’s not something I expected to find. I had expected the Bay Area to have the most postings across all job specialties.
Raw Compensation Data
I gathered the following data from levels.fyi. I only recorded data for workers with “senior” experience across these metros:
Median Compensation for Senior Technologists According to Levels.fyi
|Software Engineer||Product Manager||UX Designer|
|SF Bay Area||$300,000||$300,000||$242,050|
Using the Bay Area, CA as the standard for compensation makes sense because it leads across all disciplines for compensation. Here’s how much people actually report being paid in these metros compared to the Bay Area salaries for the same role and the same seniority:
How Much Less Do Techies Get Paid Outside the Bay?
|Software Engineer||Product Manager||UX Designer||Actual COLA|
|SF Bay Area||100%||100%||100%||100%|
Can the Best City Dull the Bitter Taste of COLA?
Of course, a dollar isn’t created equal in every state of the union. California salaries are higher, but so are taxes [source]:
Here’s what a software engineer making the median salary in each location should expect to pay in taxes per year. Note that I’ve computed this using a single filing status, not married filing jointly.
Effective State Taxes for a Software Engineer in 6 US States
|Software Engineer Comp||Effective State Tax Rate|
Since CA is the most expensive for both compensation and tax rates, we can adjust the COLA table accordingly:
Tax-Adjusted Compensation for Techies Outside the Bay Area
|Software Engineer||Product Manager||UX Designer||Average COLA|
|SF Bay Area||100%||100%||100%||100%|
The tax lens helps Seattle, Austin, and Miami be a bit more competitive. In Seattle’s case, it’s close to being on par with the Bay Area! For Austin and Miami, the bump helps, but they still lag far behind CA peers.
Cost of Living Comparisons
So we know that techies in New York report being paid ~40% less in after-tax dollars than their California peers. But perhaps it’s 40% cheaper to live there. If that were the case, you could live in either city and still take home the same number of dollars.
Here’s a comparison of after-tax compensation to the actual cost of living. Since the Bay Area is the most expensive city, I’ve used it as the point of comparison [source]:
Cost-of-Living-Adjusted Tech Compensation By City
|How Much Tech Workers Get Paid||Actual Cost of Living||Total Lifestyle Comp Score|
|SF Bay Area||100%||100%||N/A|
Here, Seattle pulls into a decisive lead due to tax advantages and lower cost of living. Austin is pulls into second place and looks surprisingly good. All the other cities cluster between -28% and -36% in terms of comp.
So far, Seattle is in the lead, but we still need to consider job quality and other intangibles.
Are There Good Jobs in the Best City?
Up to this point, I’ve assumed that a job is a job. In this model, techies don’t care at all what kind of job they have. But of course, people do care about the quality of their job.
There are a lot of ways to measure the quality of jobs in a particular metro. In my (admittedly biased) opinion, density is probably the best measure. Not because I value quantity over quality, but because I think quantity and quality are correlated. The more major, innovative companies cluster in a particular spot, the more job specialization occurs. Specialization offers workers more options and more choice should lead to better jobs.
So, across the 7 cities in this analysis, where are major tech companies located?
Wild Things Big Tech Companies Are
Starting with the largest 100 tech companies by market cap, 61 are based in the US. [source] Of those 61 located in the US, 44 are located in the cities we’re considering. Here’s the distribution of major tech companies across our cities:
Surprisingly, Austin actually wins out when compared with non-SF cities. While that may look impressive, it’s not as big of an advantage as it seems. Here are the market caps of the companies based in Seattle vs those based in Austin:
|Market Cap of Companies Headquarters in Seattle vs. Austin|
|Microsoft||Seattle Metro||2.46 Trillion|
|Amazon||Seattle Metro||1.33 Trilliion|
|Tesla||Austin Metro||678 Billion|
|Oracle||Austin Metro||282 Billion|
|Dell||Austin Metro||48 Billion|
|CrowdStrike||Austin Metro||43 Billion|
The market cap of Seattle’s big tech companies is a whopping 3.79 trillion. Meanwhile, the market cap of Austin’s 4 large tech companies is only 1 Trillion. This suggests that there is nearly 4x more capital concentration in the Seattle metro than in Austin. That should mean more teams, jobs, specialization, and unique opportunities.
Another roundabout way to get at the quality of tech jobs might to look at Venture Capital investment by city. Just like looking at large-cap companies, this is fairly indirect. There are lots of terrible VC-backed businesses, just as there are lots of great non-VC-backed businesses. But this measure should at least tell us where tech founders are trying to scale high-growth ventures [source]:
Here, Miami doesn’t make the cut and Seattle comes out behind Austin, which is a bit surprising. NYC and Boston both make a surprisingly strong showing too.
Narrowing Down the Best City: Seattle vs Austin
We’ve seen above that Seattle and Austin could each claim the throne of being the best city for techies in 2024:
- You’ll keep more of your money than in the Bay Area.
- Both cities have a bunch of job listings, even compared to the Bay Area in California.
- There are more big tech companies headquartered in Seattle and Austin than competing destinations.
The VC investment picture complicates things a bit. NYC and Boston receive substantially more investment than either Seattle or Austin. So if you want to work for a VC-backed company, NYC and Boston look competitive. But I would argue if that’s your only preference, you should live in the Bay Area. The Bay receives more VC funding that NYC and Boston put together.
But this is Overthinking Money, not Overthinking Venture Funding. NYC and Boston are disqualified on the basis of their lower take-home compensation numbers.
So, between Seattle and Austin, the question comes down to more of the intangible quality-of-life stuff. I don’t think it’s fair to directly compare the two cities on some axes because they are so different. For one thing, the Austin metro is quite a bit smaller than Seattle (2.4M vs 4.0M). So if you want to compare things like arts and culture, you would expect Seattle to win handily for no other reason than there are 1.6M more people creating cool stuff.
But, we can still compare some other salient features that techies probably care about.
The Best City for Weather
Seattle winters are long and dark. Every time I’ve visited in the winter, I immediately get hit with Seasonal Affective symptoms. I think this contributes to the somewhat higher rates of depression in the Pacific Northwest. For comparison, 23.9% of people in Washington have been told they are experiencing depression vs Texas’ 18.6% [source]:
But Austin’s summers are incredibly hot. I don’t mean a bit warm, I mean dangerous-for-human-life levels of heat. I think for many people, a bit of sadness in the winter is better than having to live indoors for 8 weeks in late summer to avoid heat stroke [source]:
While researching this article, I was surprised to learn that 57% of Americans prefer living in a hotter climate. Only 29% said they prefer to live in a cold climate. [source] On that basis, I’m inclined to declare Austin the winner of the weather category. But the summers are just too brutal. I think for most people, Seattle’s weather (winter depression notwithstanding) is actually preferable.
Winner: Seattle, WA
The Best City for Politics
Texas has a reputation for being an overwhelmingly politically conservative state. It is certainly much more politically conservative than Washington state. But the cities of Austin and Seattle are pretty close in their breakdown of republican and democratic voters [source]:
Despite this, there’s no denying that Texas is more politically conservative. Given that technologists skew heavily towards the democratic party [source], this one seems pretty clear. If you care deeply about state politics and you are a techie, you should live in Seattle.
Winner: Seattle, WA
The Best City for Climate Change Risks
Most techies are democrats and most democrats are worried about climate change. [source] So it seems relevant to include a section on climate change risks. Austin and Seattle aren’t listed in the 10 best or worst climate change cities [source], which is nice. But Seattle appears to win this one too [source]:
Winner: Seattle, WA
The Best City for Outdoor Recreation
I used to joke that what people like the most about the Bay Area is getting out of the Bay Area.
That never felt like a ringing endorsement, but there is some advantage to being near other environments. From San Francisco, the mountains are 5 hours east, Redwood forests are 2 hours south, and surfable beaches are 1 hour north.
In this category, Seattle has a huge advantage. If you live in the Seattle metro, you’ll have access to skiing, sledding, swimming, boating, mountains, and incredible forests all within a 3-5 hour drive.
In Austin, there are 3 boatable reservoirs and a few small rivers within a 2 hour drive. These bodies of water offer swimming, boating, and other water sports. The Gulf Coast is ~6 hours away by car which makes it inconvenient to access. Also, as someone raised on Atlantic Ocean beaches, I find the Gulf to be kinda gross.
The nearest mountains and winter sports are a 1.5 hr plane flight or 15 hour car drive to southern Colorado. My favorite outdoor hobby (backpacking) is pretty much impossible here in Austin. There’s almost no elevation change for hundreds of miles in any direction! I actually fly to Seattle for most of my hiking.
Winner: Seattle, WA
Conclusion: Seattle FTW
Among the 7 cities that we started with, all but 2 (Austin and Seattle) require tech workers to take substantial cuts in purchasing power. Those cities were eliminated right out of the gate.
That leaves only Seattle (+10% comp compared to the Bay) and Austin (+6% comp) standing. Here’s the summary of all the other categories we reviewed for those two cities:
The Best City For Technologists in 2024: Seattle, Washington
|Comp Benefit Over the Bay Area||🏆 (+10%)||🚫 (+6%)|
|# of Large Tech Company HQs||🚫 (2)||🏆 (4)|
|Market Cap of HQ Tech Companies||🏆 (3.79T)||🚫 (1.0T)|
|VC Funding in Q2 2023||🚫 ($0.6B)||🏆 ($1.0B)|
|Climate Change Risks||🏆||🚫|
|Access to Outdoor Reaction||🏆||🚫|
I’ve really enjoyed living in Austin for the past 3 years, but that’s because I’m living near family, not the city itself. I’m excited that my kids will get to have relationships with their grandparents, uncles, aunts, and cousins. I love that we can do the holidays here with little to no travel.
But if I could magically relocate all my family to Seattle, I’d be up there in a heartbeat.
Get New Posts Delivered to Your Inbox
I post about financial topics 1-2 times a week. Add your email address below to get that content delivered straight to your inbox.