The high cost of living in Silicon Valley is widely reported, so too are the lofty paychecks. The average pay in Silicon Valley is $2,069 a week, the highest in the country. It’s so high, in fact, that even factoring the high cost of living, the area’s wages still come out on top in terms of relative purchasing power, according to the Pew Research Center.
Average weekly wages in the third quarter of 2015, by metro area, and adjusted be regional price parities, shows the San Jose-Sunnyvale-Santa Clara, Calif. area, which encompasses Silicon Valley, with a weekly wage of $1,706. The next highest average is California-Lexington Park, Md. at $1,277.
The smallest adjusted wage is found in Ocean City, New Jersey, which has both one of the lowest unadjusted average wages ($640 a week) and a cost of living that’s 8.4% above the national average. Together, that makes the area’s adjusted average weekly wage just $590.
High regional price levels can erode the real value of wages, but relatively low prices can effectively offset low wages, at least to some extent. In Beckley, West Virginia, for instance, the average weekly wage is among the lowest in the nation ($707), but the metro area also has the lowest cost of living; as a result, the adjusted average weekly wage is 28% above the actual wage. The biggest negative differential is in Honolulu, which has the highest regional price level of any metro area in the country and an average weekly wage ($932) that’s somewhat lower than the national average. When adjusted for the local cost of living, Honolulu’s average wage shrinks by more than 18%, to $761.