The Best $100,000+ Tech Jobs Are Increasingly Concentrated in Just 8 Cities

The Wall Street Journal The Wall Street Journal

High prices aren’t enough to stop the momentum of the leading tech cities

In theory, the high-wage jobs of the technology industry could be filled by people working anywhere. But in practice, the best tech jobs in the U.S., offering salaries in excess of $100,000 a year, are becoming increasingly concentrated in the metropolitan areas of just eight cities, according to new research.

The eight leading U.S. tech hubs account for slightly less than 10% of U.S. jobs and about 13% of overall job postings. But the cities — Seattle, San Francisco, San Jose, Austin, Raleigh, Washington, Baltimore and Boston — account for more than 27% of the listings for U.S. tech jobs, research from Jed Kolko, the chief economist of the job-search website Indeed, shows.

That’s already a striking concentration, but tech jobs with the highest salaries are even more centralized. Among jobs that typically pay over $100,000, nearly 40% of openings are in those eight cities.

“Tech jobs” in this research are defined as computer occupations, computer and information systems managers and computer engineers. As a site that gathers millions of job listings, with especially good coverage for tech jobs, Indeed’s data allows for an even more detailed look at different occupations than Labor Department data. The hubs are defined as the cities with the highest share of jobs in tech, so cities like New York City, with large populations but not a concentrated focus on tech, do not count.

Among some of the more specialized and fastest-growing tech occupations, such as engineering program managers, machine learning engineers or database engineers, more than half of the available jobs in the entire country are located in the hub cities.

By these definitions, San Jose, Calif., stands out, with the highest share of tech jobs and the most jobs in the cutting-edge, fast-growing occupations.

“There’s been essentially no dispersion of tech jobs,” said Mr. Kolko, who conducted the research. “Which metro is the next Silicon Valley? The answer is none, at least for the foreseeable future. Silicon Valley still stands apart.”

The finding is surprising in part because the cities are some of the most expensive in the country — for both employees and employers. Of the eight, only Raleigh, N.C., has seen home prices rise at a pace comparable to the national average. The other seven cities have grown dramatically more expensive in recent decades.

While high costs and the possibility of telework might lead some employers to locate staff outside the hubs, other employers might be attracted to the hubs for their deep talent pools, for their proximity to venture capital, or simply because even in high-tech fields there’s huge value in face-to-face interactions. Whatever the reason, the forces of centralization are winning out.

The concentration of lower- and medium-salary jobs, defined as those earning less than $100,000 a year, has been little changed. But the tech hubs’ share of higher-salary jobs — salaries over $100,000 — has increased by 5 percentage points since 2014.

There are some signs the high costs take a toll. Over the past year, Seattle has gained job share against its more expensive counterparts in San Jose and San Francisco, according to Indeed’s data, a tentative sign that they are becoming too expensive for employers.

“The gap between rich and poor metros has grown,” said Mr. Kolko. “And a small number of places are getting a tighter grip on higher-wage jobs.”