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IT jobs market booming in the Southwest

Lamont Wood | Feb. 10, 2015
We look at the prospects for both hiring managers and job seekers in the first in a series of reports examining IT labor markets across the country.

The differences were starker for individual cities with strong IT markets. The average total compensation in San Jose was $125,829, and in Boston it was $131,624. In the Southwest, Austin led at $105,799, but that put it 20% below Boston and 16% below San Jose. Other examples were $98,365 in Dallas, $95,205 in Las Vegas and $101,240 in Phoenix.

Incidentally, IT pay in the Southwest may be catching up to the rest of the country, as compensation increases were higher here than elsewhere, according to Computerworld's survey. Compared to 2013, average compensation was up 2.6% in the Southwest, while the average rose 1.8% in New England and 2% in the Pacific region.

But the second part of the equation, the cost of living, is what really closes the gap. While salaries in the East Coast or West Coast technology centers might be 20% or more higher than in specific cities in the Southwest, the cost-of-living differential (especially including housing) on the coasts is much more significant, according to figures from the U.S. Census Bureau's Cost of Living Index.

The index uses a weighted composite of the local cost of groceries, housing, utilities, transportation, healthcare, and miscellaneous goods and services to gauge the price of day-to-day life in different parts of the country, with the national average set at 100.

According to Census Bureau figures from 2010, the most recent year for which data is available, Boston's overall composite index rating was 132.5, San Jose's was 156.1, San Francisco's was 164 and Manhattan's was a giddy 216.7.

Meanwhile, San Antonio came in at 95.7, Austin's index figure was 95.5, Houston's was 92.2 and Dallas' was 91.9. Outside of Texas, index figures were a little higher, with Phoenix at 100.7 and Las Vegas at 101.9, highest in the Southwest.

The comparison gets even starker when considering only the cost of housing, which the Census Bureau used as 29% of the cost-of-living composite in its 2010 calculations. Seattle's housing index figure was 140.3 and Boston's was 152.7. And in San Jose, San Francisco and Manhattan the figures were off the charts, at 260.3, 281 and 386.7, respectively.

But in the Southwest all the figures were under 100: Dallas was lowest, at 70.7, followed by Houston at 82, Austin at 85.1, Phoenix at 90.4, Las Vegas at 94.1 and San Antonio at 95.3.

So even disregarding Manhattan, the cost of housing in the Southwest can be as little as one-third of that in some major technology centers.

"We are not able to compete with either coast, not if you compare salary to salary," says Robert Lagoudis, director of IT business management at San Antonio-based USAA, an insurance carrier for members of the armed forces and their families and a company that is regularly ranked in the top five on Computerworld's annual Best Places to Work in IT list.


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