Survey: Geography Still Affects Salary

March 6, 2003 ( - HR professionals at national companies still have to face a historic truth about compensation: Employees' addresses can affect the size of their paycheck.

Armed with the latest data showing a significant geographic pay variation for the same job, Mercer Human Resource Consulting says large employers with staff in multiple locations throughout the US have to face the potential consequences of these differences. Sensitive compensation issues can arise when an employee moves from a relatively high-salary area to a relatively low-salary area, or vice versa, Mercer researchers point out.

Mercer’s latest Geographic Salary Differentials Survey continued to find different pay for the same work in different places. A job that demands an average salary of $30,000 nationally can pay as little as $26,820 in Little Rock, Arkansas or as much as $36,870 in San Francisco. This represents a pay variation of more than 33 percentage points – from 10.6% below the national average to 22.9% above.

Mercer’s 2003 findings suggest that geographic pay variations are less pronounced, but still present at the pay scale’s higher levels.  For a job with an average salary of $60,000 nationally, pay varies from a low of $54,780 (-8.7%) in Asheville, North Carolina, to a high of $70,980 (+18.3%) in San Francisco, for a variation of 27 percentage points.

Even at $90,000, there are still geographic pay variations, according to Mercer.  Cities like   Omaha, Nebraska, Knoxville, Tennessee, and Buffalo, New York, represent the lower end of the pay range at $85,500, $85,590, and $85,680, respectively. 

Meanwhile, cities like San Francisco, San Jose, and New York hold the top spots at $104,400, $103,590, and $103,410, respectively.  Among the cities in Mercer’s survey, the pay variance at this salary level is about 21 percentage points.
Each year, Mercer’s survey compares local pay rates for more than 175 cities    to national medians at different pay levels.