For the vast majority of Americans, gainful employment is what makes a decent standard of living possible. While factors such as education, choice of vocation, luck, and personal attributes help determine an individual’s level of income, another major factor is simply the city where one lives.
Often, the same job can pay much more in one area of the country than in another. The average annual salary of a lawyer in San Jose, California, is $181,120. In Lake Charles, Louisiana, it is $50,370. To identify the cities with the highest (and lowest) paying jobs, 24/7 Wall St. reviewed annual wage statistics in U.S. metropolitan areas from the U.S. Labor Department.
Many of the highest paying cities are located in West Coast states like California and in East Coast states like Connecticut. But not all of the best paying cities are in coastal states. Metro areas Fairbanks, Alaska; Durham-Chapel Hill, North Carolina; and Minneapolis-St. Paul Bloomington, on the border of Minnesota and Wisconsin, are also among the best cities to find a high paying job.
On the other end of the spectrum, the two lowest-paying cities in the nation are in Texas, followed mostly by metro areas scattered across other Southern states. The median annual wage in all of these cities is less than $30,000. By contrast, the median annual wage in all of the top paying cities is well above $40,000.
Industrial composition invariably determines the distribution of jobs in a labor market, which in turn largely determines workers’ paychecks. One way to gauge a labor force is by comparing its composition to the nationwide workforce composition. The location quotient measures these differences. It is the ratio of the share of workers in a metro area employed in an occupation over the share of workers nationwide employed in that same occupation. A large location quotient does not necessarily mean the job is the most common, or even remotely common, in that area. Location quotients measure the relative concentration of occupations in a given metro area.
In 15 of the 25 cities with the highest paying jobs, the most heavily concentrated occupations relative to their national concentration — that is, the jobs with the highest location quotients — are in science or engineering. For example, in the 10th highest paying city Boulder, Colorado, workers are nearly 90 times more likely to be employed as atmospheric and space scientists than American workers are nationwide. In the remaining 10 metro areas, the leading occupation is either related to science, technology, engineering, or mathematics, or it is in a legal field.
Not only are these professions high paying compared to other jobs, but also these jobs tend to pay more in these cities compared to other cities. For example, in each of the nation’s three top paying metro, the median wage in the most highly concentrated occupation exceeds $100,000 annually. In all three cases, that typical paycheck is at least in line with or exceeds the national median wage for the occupation.
Compared to these tech and science hubs, jobs in the nation’s lowest paying cities are distributed very differently. The most heavily concentrated jobs in these areas vis-a-vis the national workforce tend to be lower-paying occupations such as personal care aides, miscellaneous food processing workers, rock splitters, and agricultural inspectors.
To identify the cities with the highest and lowest paying jobs, 24/7 Wall St. reviewed the annual median wage in 381 metropolitan statistical areas from the Occupational Employment Statistics program of the Bureau of Labor Statistics. Data is for May, 2017, the most recent period for which data is available. For larger metro areas, the BLS reports data metropolitan divisions, which are subsets of the broader metro area. For the purposes of our analysis, we aggregated metropolitan divisions to the corresponding metro area. The highly concentrated occupations listed are jobs with the largest location quotients. LQs are ratios measuring relative concentration of jobs in an area compared to their concentration in the national workforce. To calculate, the share of workers in a metro area employed in an occupation is divided by the share of workers nationwide employed in that same occupation. The Jan. 2018 unemployment rate for each metro area is the latest available seasonally adjusted rate and was also obtained from the BLS. Poverty rates came from came from the U.S. Census Bureau’s 2016 American Community Survey and are one year estimates.