At the beginning of 2020, before COVID-19 broke out in the U.S., HackerRank's 2020 Developer Skills Report suggested that around 40% of software developers worldwide didn't think they were paid fairly in relation to their peers.
The national median salary for software developers is $107,500, with the highest salaries coming out of Silicon Valley. The generous California pay rate is at least partially due to the extremely high cost of living in the area. According to VOC, the 2018 average home value in San Francisco was around $1.34 million, suggesting that a median down payment of $250,000 would be required. This renders housing costs in the San Jose/Sunnyvale/Santa Clara area as some of the highest in the country.
With the pandemic motivating software developers to work remotely, many employees don't see the point in returning to the office once the virus stops spreading.
In May, Facebook's Chief Executive Mark Zuckerberg announced that as many as half of the company's 48,000 employees would make the permanent move to work from home. There is a catch, though – Zuckerberg added that those working from more affordable locations won't be able to keep their Silicon Valley-sized salaries.
Similar decisions have been made by Twitter and the payments company Square, both led by Jack Dorsey. Over at Google, employees have been told they can work from home through the end of the year, with no news about making the arrangement permanent.
The good news is, adjusted salaries aren't as bad as they seem.
According to data from the US Department of Labor Bureau of Labor Statistics (BLS) and the Urban Research Institute (URI) 2020 Standard of Living Index, the purchasing power of Silicon Valley's high salaries is effectively discounted by more than 40% due to the inflated costs of living in the area.
Buying power varies significantly across the country, which means employees living in places with lower salaries and cheaper costs of living may be able to enjoy a better quality of life than their Silicon Valley counterparts. They could experience a higher standards of living, reduced transport expenses, more free time, and could even be more likely to purchase a house.
In what has been dubbed "The Great Tech-xodus," many companies left Silicon Valley well before the pandemic. According to data from the US Census Bureau, the five-county Bay Area lost a net total of nearly 35,400 people between 2013 and 2017.
It turns out that the best place for a software developer to move is to Winston-Salem, North Carolina. Here, the median software developer salary is $121,600, when adjusted for purchasing power – well above the purchasing power of $76,700 in San Jose and $85,500 in San Francisco.
If North Carolina doesn't fit the bill, San Antonio, Texas has the second-highest salary at $117,500, just beating out Seattle, Washington, which is currently the second leading software development hub in the country.