It Pays to Work in Silicon Valley

Do you know the way to San Jose?

The Silicon Valley city and its environs offer a tempting attraction: The average pay for workers there, according to the latest federal figures, is the highest in the nation.

In a newly released report, the U.S. Bureau of Labor Statistics said that annual pay in San Jose and the rest of Santa Clara County averaged $42,409 in 1995, up 8.4% from the year before.

California posted a much more modest pay gain in 1995 of 2.8%, lagging behind the national increase of 3.4%. All the same, it was a substantial improvement from the state’s weak 1.4% increase in 1994.

What’s more, with its workers’ pay averaging $30,716, California held onto its seventh-place ranking among the 50 states.

But in Southern California, the news was less upbeat. In both Los Angeles County and Orange County, pay gains amounted to only 1.9%.

Still, the two counties remained among the nation’s leaders, with Los Angeles’ average pay coming in at $32,445 (19th-highest among the 311 metropolitan areas ranked) and Orange County at $30,315 (28th place).

Analysts said the situation in Los Angeles, whose national ranking fell from 17th in 1994 and 12th a decade ago, reflects the fragility of the local economy.

San Jose, on the other hand, is benefiting from the abundance of well-paying technology-related jobs in prosperous Silicon Valley. In 1995, it edged out New York to become the top-paying metropolitan area in the nation.

San Jose’s army of computer engineers and systems analysts aren’t earning “the $200,000 salaries that may be more prevalent in New York, with all of the corporate headquarters there,” said Donald Peterson, regional economist for the Bureau of Labor Statistics in San Francisco.

But, Peterson added, the vast numbers of technically proficient workers in the San Jose area are drawing good salaries that pull average wages up.

San Jose also came out No. 1 in the nation in a separate pay survey for 1996 just released by William M. Mercer Inc., a big management consulting firm that specializes in employment issues.

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In fact, the Mercer poll--which tracked salaries paid to mid-level and technical employees in about 200 metropolitan areas--has ranked San Jose No. 1 for four years in a row.

The Mercer study takes the perspective of employers, showing how much more they would have to pay an employee in California than a similar hire in another city.

For example, the survey shows what California employers would have to offer to hire the type of technical specialist or manager who in an average-pay-level city would typically earn $50,000. The comparable pay level would be $59,800 in San Jose, $57,600 in San Francisco, $56,300 in Los Angeles and $54,200 in Orange County.

Charles King, a San Francisco-based Mercer consultant specializing in pay issues, said the fact that Southern California employers pay as well as they do means that “the transition has pretty much been concluded” into a healthier regional economy.

Stuart Silverstein can be reached by e-mail at [email protected] or by phone at (213) 237-7887.