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After leaving New York City last year- where the cost of living has gone insane, I moved to Knoxville TN, where the cost of living is very low. Of course for unskilled workers, the wages in Knoxville are lower too. But what about highly skilled workers?
As I travel all over town, I come in contact with with many highly skilled and educated folks living a good life in TN. I wonder what they are making salary wise in comparison to people doing the same jobs back in New York City? I am thinking about doctors, lawyers, dentists, eye doctors, CPA's, nurses, etc. Yes, they are making less, but how much less in comparison to the cost of living?
If you worked for a large Fortune 500 type company and were transferred from a place where the cost of living is high, (like NYC, Washington DC, Seattle, San Francisco, etc.,) to an office- doing the same job- (such as a medium sized city in the south), what would happen to your ECONOMIC standard of living?
The salary is typically adjusted to the local market, based on my experiences. If you transferred from TN to New York City, you should get a move upward in salary, as the COL is higher. I transferred from Southern California to the Bay Area (high COL to even higher) and my salary and compensation package was adjusted upward 15%. Not sure what happens going from a higher COL area to a lower COL area.
I used to work in consulting. And our rates were certainly different based on location. The same work in DC is going to be more expensive than it would be in Atlanta. And the biggest factor is that the cost for talent is going to be more expensive in DC.
I have had colleagues who got on long term contracts in the DC area, but then were able to move because the contact was mostly remote. So they were basically making DC wages while living in areas with much less COL. However, this situation is not as common. In most cases, if you move, you'd have to adjust your salary expectation.
I think a big factor is with housing. If you owned a home in a higher COL area and were able to gain equity, that could likely work well for you if you relocated to a lower COL area.
I looked into transferring a while back within my large corporation from St. Louis to Pasadena. They were going to adjust my salary up, but not NEARLY enough.
I was able to buy a brand new 2100 sq ft home in a great neighborhood in St. Louis.
In Pasadena, I would only have been able to afford a 2 bdrm apt in a sketchy area and I would have qualified for Section 8 housing. This was with the salary adjustment too.
There are two big variables here: are you a local earning the prevailing local wage or someone coming from a rich and prestigious area that had a big salary?
Being from east Tennessee, wages there are often in the toilet in the private sector, outside of health care occupations. The economy is not diverse with a broad base of industries, nor are any sectors particularly strong (east TN was a manufacturing hub - and we know how that's gone). People want to move there for the pretty mountains and nice weather - combine the tourist aspect with few professional private sector jobs and a government that is not labor friendly, and you have a recipe for low wages for locals.
For what it's worth, I work in IT and have several other friends from the area who are software developers. All of us left. I am making three times my last Tennessee salary here in Indiana. I never had a job with benefits of any kind in Tennessee - in the two Midwestern states I've lived (IA/IN), I've never been without benefits. The other folks moved to Michigan - the one I'm closest to is also making triple his last TN salary. One of my cousins has a master's in accounting in east TN and cannot find work under an active CPA to be able to have the work hours to take the CPA exam/get certified. These kinds of stories aren't uncommon.
If you're coming from NYC to Knoxville, employers know you're not going to cut your salary from a third to half of what it previously was to the prevailing local wage. You may end up making less than you would in NYC, but will likely end up making substantially more than the locals with similar qualifications.
It's also important to remember that in the cheap areas, you may not even be able to find a job in what you do. Many jobs that would be direct hire in large cities are run on a temporary/contract basis in the cheap areas.
I think Knoxville is a poor example, as it's a relatively large metro (~1 million in the CSA), dominated by a university, but has an economy that resembles that of a small town. Greenville, SC would be a much better comparison as its economy has far more significant companies and is much more robust.
You also see this phenomenon happening in Nashville. Yankees from NY/MA/CT etc. moving in with large salaries are on totally different payscales than people from elsewhere in the South trying to move to Nashville.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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There is a good reason for companies like Boeing moving operations from Seattle area to South Carolina. The cost of living is much less, so they don't have to pay as much to attract the best people.
As a long-time consultant, it doesn't pay to move away from high cost areas unless you're a consultant that travels. Many folks in my business live elsewhere and travel or hold primary residence for the purpose of saving taxes.
If you're an employee I don't think it's worth it at all because all companies will try to reap the benefits of a cheaper town by paying less on everything including labor.
A typical worker in NJ/NYC making $75k, down in the south like TN or FL they're paying $45k. While living is cheaper it's not that much cheaper overall. Anyone in TX will tell you while things are cheaper there's always hidden cost.
If you telecommute like some suggest, it hurts you ability to get promotions. I have never in my career witness a remote worker get promoted. Your job is now just a gig.
I looked into transferring a while back within my large corporation from St. Louis to Pasadena. They were going to adjust my salary up, but not NEARLY enough.
I was able to buy a brand new 2100 sq ft home in a great neighborhood in St. Louis.
In Pasadena, I would only have been able to afford a 2 bdrm apt in a sketchy area and I would have qualified for Section 8 housing. This was with the salary adjustment too.
Exactly. The gap between COL and salary is large (in both directions) when relocating.
I moved to a very high COL area and got a large bump but that's because it was a different employer and I had other offers so was in a good negotiating position. After a few years, I moved again and got another large bump. That closed the gap.
Staying with the same employer won't get people squat when moving to a high COL area.
If OP is thinking to go from a high to low COL area and preserving his/her salary, I would think he/she may need to take a step up in terms of responsibility. The wiggle room in terms of salary shifts depending on what position one holds. So if a low COL place is looking to attract top talent form a major metro, that top talent won't take a deep pay cut. Similarly, a doctor who's paid mostly by third party payors will have a slight adjustment but won't take a deep cut either.
As a long-time consultant, it doesn't pay to move away from high cost areas unless you're a consultant that travels. Many folks in my business live elsewhere and travel or hold primary residence for the purpose of saving taxes.
If you're an employee I don't think it's worth it at all because all companies will try to reap the benefits of a cheaper town by paying less on everything including labor.
A typical worker in NJ/NYC making $75k, down in the south like TN or FL they're paying $45k. While living is cheaper it's not that much cheaper overall. Anyone in TX will tell you while things are cheaper there's always hidden cost.
If you telecommute like some suggest, it hurts you ability to get promotions. I have never in my career witness a remote worker get promoted. Your job is now just a gig.
You're assuming that NJ/NYC employees can even find a job in their field in the South.
My last job was at a software company that developed products and services for the financial services industry. We had well over 100 clients in the US when I left. As far as I know, we had no competitors or even somewhat similar firms in the state.
We had two clients based out of Tennessee - one small and one medium sized. Between them, I'd say they only employ a hundred people, if that.
Those are probably the majority of the jobs in the field in the state, and who knows if those firms are hiring, and if they are, would they be hiring for anything you have expertise in?
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