High-paid finance jobs are moving outside of large cities

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

It shouldn’t be surprising to see that the average payroll is highly dependent on location. Let’s take the finance industry as an example. As evidenced by the U.S. Census Bureau’s County Business Patterns data, the average annual payroll by state in 2012 ranged from $48,000 (which is more than twice the annual payroll of someone working full-time for minimum wage) in South Dakota to $140,000 and $146,000 in Connecticut and Washington, D.C. respectively. The only state where an even higher number was registered is New York, with an average annual payroll of $190,000.

Once we get down to the county level, the difference in average payroll becomes even more significant. Quite obviously, the largest annual payroll numbers are registered in New York City. If we adjust those numbers to 2012 prices (using the Consumer Price Index data provided by the U.S. Department of Labor), we see that it increased from $243,000 in 2000 to $285,000 in 2012, an increase of 17 percent.

What is more interesting is that the two counties with the next highest average payrolls have seen an even more significant increase. In the Westchester County, the average payroll increased by 44 percent and in Suffolk, the average payroll grew by 77 percent in those 12 years. That equates to a net payroll growth of 5 percent per year, which is especially impressive considering that we are looking at the county average numbers.

You can see how the CPI-adjusted payroll has changed throughout the years on the map of the state:

By the year 2000, only four counties had an average payroll greater than $70,000 for jobs in the sector (the two mentioned above along with the New York and Nassau counties). This number increased to seven by 2004 and to nine by 2012, while the number of finance jobs in the original four counties decreased from 440,000 to 360,000.

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About Andrey Kamenov

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

Andrey Kamenov is a data scientist working for Advameg Inc. His background includes teaching statistics, stochastic processes and financial mathematics in Moscow State University and working for a hedge fund. His academic interests range from statistical data analysis to optimal stopping theory. Andrey also enjoys his hobbies of photography, reading and powerlifting.

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