In the past two years, the tech industry has experienced layoffs and financial constraints, impacting pay. However, tech worker compensation has risen in San Francisco, surpassing other cities. The median pay for tech workers in San Francisco increased by 6% from 2022 and nearly 4% from 2021, reaching $249,000 this year. This is 11% higher than Seattle, which followed with a median pay of $225,000, and significantly eclipses New York City at $185,000, despite similar living costs.
Interestingly, the rise in San Francisco's median pay can be attributed to selective hiring, skewed towards senior-level candidates with higher earnings, as well as returning to office (RTO) programs. Conversely, cities like Austin, Portland, and Denver experienced a decline in tech worker pay this year, possibly due to RTO mandates.
Notably, San Francisco has seen a significant population increase, along with neighboring counties such as Alameda and Santa Clara. This resurgence can be attributed to the emerging importance of artificial intelligence (AI) and generative AI. AI companies are aggressively competing for talent, with OpenAI, the organization behind ChatGPT, known for offering attractive pay packages.
According to industry leaders like Garry Tan, the AI industry has contributed to San Francisco's rebound as a prominent tech hub due to the need for collaboration and the city's concentration of pioneering AI companies such as OpenAI and Anthropic.