Median Salaries By City – Who Makes More?

 Today Forbes posted an article titled “The U.S. Cities Where People Earn The Biggest And Smallest Paychecks”.  In it, Forbes compiled data on the median salaries in several major metropolitan areas and ranked them from highest median salary to lowest. What caught my eye was Seattle-Tacoma-Bellevue's ranking at #5 - not bad!

The table has been clipped for length but can be viewed in its entirety here: http://www.forbes.com/sites/jacquelynsmith/2013/11/27/the-u-s-cities-where-people-earn-the-biggest-and-smallest-paychecks/2/

The data was obtained from Payscale.com. They found the 100 largest “Metropolitan Statistical Areas”, based on 2012 population estimates by the Census, and provided Forbes with the median pay of workers with at least a bachelor’s degree in those areas.  The median pay is split into three experience levels: Overall Median Pay (all years of experience), Starting Median Pay (5 or less years of experience), and Mid-Career Median Pay (10 or more years of experience).

The way the data was collected was not elaborated within the article so I turned to Payscale.com. Helpfully, they have a page that explains their data collection methods: http://www.payscale.com/resources_methodology. The site collects their salary data by offering free salary comparison surveys on their website. They offer no compensation or other incentives for survey filling, and also collect a great deal of information such as years in field, skills, education, and experience, which they claim makes them unique among salary surveyors. Payscale.com also only uses profiles submitted within the last year, and claims to process 300,000+ unique salary profile additions per month.

As a result, Payscale.com appears to be a reliable source of salary information. The lack of incentives discourages salary inflation by survey-takers, and the time limit for the data ensures relevance. Their large data pool further ensures reliability.

The way the data is interpreted by Forbes, however, is less commendable. The title of the article seems slightly misleading – the median salary of a worker with at least a bachelor’s degree will be quite different from that of a city’s overall population, but there is no mention of this filter in the title. The division of career experience into “Starting” and “Mid-Career” appears somewhat arbitrary, especially since “Mid-Career” starts from 10 years and has no endpoint.

Salary and cost-of-living are also highly intertwined, and Forbes does not address this. The article goes over how astounding some of the median salaries are, but fails to offer the counterpoint of often-astronomical cost-of-living prices in those metropolitan areas.

In my opinion, while the numbers in this article are very solid, Forbes missed the chance to add an obvious caveat and as a result readers may take away the incorrect conclusion that any worker can attain incredible salary increases merely by moving to a top-ranked city, not realizing the impact cost-of-living increases may have on those gains, and that only those with bachelor's degrees are taken into count.