Salaries in These Cities Make Up for the High Cost of Living
… But retail sales notably lag behind
The metropolitan areas where Russell 1000 workers with a family of four can earn the highest relative wages compared to their local cost of living are also among the highest cost-of-living regions in the US, such as Seattle, Silicon Valley, and Austin.
Retail sales roles provide important entry-level positions for millions of American workers, yet the wages earned by retail sales employees consistently fall below the living wage threshold.
For entry-level retail jobs, both the location and the employer significantly impact how much workers make compared to their local cost of living. Top companies for entry-level retail positions include Best Buy, Nordstrom, Skechers, and Macy's.
In today's rapidly shifting economic landscape, understanding where and how workers and families can achieve financial stability is more critical than ever. Especially in an election year when wages are top of mind for many and as economic challenges and uncertainties grow, the ability to support and sustain financial well-being for employees becomes a vital component of both organizational success and social responsibility. This week, we present research from our collaboration with JUST Capital.
We want to better understand in which cities and metropolitan areas employees at Russell 1000 companies can earn the best average wages compared to their cost of living. Which places offer average wages that exceed the local living wage necessary to cover basic budgetary needs? While a living wage covers the basics, including housing, food, healthcare, and other essentials, the excess amount provides additional income that allows for savings, discretionary spending, and improved quality of life necessary for true economic stability. We use the MIT Living Wage calculator to get living wages by metropolitan area.
When considering which cities offer the highest relative wages paid by Russelll 1000 companies on average to all employees, it may be surprising to find that some of the highest cost-of-living areas in the U.S, such as Seattle, cities in the Northeast, Silicon Valley, and Austin, also top the list of areas where a family of two working adults with two children can earn the highest rate above a basic needs-based living wage. This finding indicates that the companies represented in these regions, as well as the prevailing wages offered in certain roles, can more than offset the high living costs.
The map shows how much employees at Russell 1000 companies earn above their local living wage threshold. For example, the living wage estimate, or amount needed to meet basic budgetary needs, for a family of two adults and two children in Austin is $52,800 per worker (assuming both adults work). Our data shows that on average, the average Russell 1000 employee in Austin makes $114,000, which is 160% above the local living wage estimate. This is certainly driven by the fact that Austin has a high concentration of high-paying companies with highly paid roles. It tells us that if one could be any worker with any role in a Russell 1000 company, on average, a job in Austin would be a good deal. On the other hand, employees in Corpus Christi, Texas only make 49% on average above the living wage – meaning that while the cost of living is lower, average earnings are also much lower.
At Russell 1000 companies, Software Engineers are among the roles earning the highest relative wages above their local living wage threshold, despite often being overrepresented in very high cost of living areas like the Bay Area or Austin. On the other hand, wages for retail sales roles at Russell 1000 companies, which are highly represented across all metro areas, on average only barely go up to their local living wage threshold.
Retail sales roles also have some of the largest variations in excess living wages across locations. This is driven by a large, diverse workforce and wide presence across different regions. For those starting their careers in retail, the location plays a crucial role in determining financial viability. California not only provides a higher likelihood of achieving wages exceeding local living wages in retail roles but also maintains this advantage in entry-level positions.
An entry-level sales employee in Merced, California, working in retail at a Russell 1000 company can make on average 26.4% more than the living wage threshold for a household of one. In Charlottesville, Virginia on the other hand, employees make 21.4% percent less than their local living wage threshold.
Besides location, the employer also plays a role in determining financial viability. Certain companies, especially Best Buy, stand out for their higher pay for entry-level retail jobs. Best Buy, Nordstrom, Skechers, and Macy's are notable for offering wages that exceed the local living wage thresholds, making them attractive options for those entering the retail sector. On average, entry-level sales employees at Best Buy make 41% more than their local living wage for a household of one.
These insights underscore the complex landscape of wages and living costs across the US, even at the Russell 1000 companies. They highlight the importance of considering both geographical and role-specific factors when evaluating economic stability and opportunities for families.
