11-10. Working individually or in groups, access relevant Web sites to determine what equitable pay
ranges are for these jobs: chemical engineer, marketing manager, and HR manager, all with a
bachelor’s degree and 5 years’ experience. Do so for the following cities: New York, New York; San
Francisco, California; Houston, Texas; Denver, Colorado; Miami, Florida; Atlanta, Georgia; Chicago,
Illinois; Birmingham, Alabama; Detroit, Michigan; and Washington, D.C.
For each position in each city, what are the pay ranges and the average pay?
Does geographical location impact the salaries of the different positions? If so, how?
City, State
Salary
New York,New York
San Francisco,California
Houston, Texas
Denver, Colorado
Miami, Florida
Atlanta, Georgia
Chicago, Illinois
Birmingham, Alabama
Detroit, Michigan
Washington, D.C.
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
pay ranges
average pay/ year
CHEMICAL ENGINEER
$79k - $114k
$95,087
$82k - $119k
$98,802
$68k - $97k
$81,018
$67k - $96k
$79,935
$64k - $92k
$76,948
$65k - $94k
$78,187
$70k - $101k
$83,855
$62k - $90k
$74,837
$67k - $97k
$80,393
$73k - $106k
$87,989
POSITIONS
MARKETING MANAGER
$98k - $175k
$130,481
$102k - $182k
$135,579
$84k - $149k
$111,175
$83k - $147k
$109,689
$80k - $141k
$105,590
$81k - $144k
$107,291
$87k - $154k
$115,067
$77k - $137k
$102,693
$83k - $148k
$110,318
$91k - $162k
$120,741
HR MANAGER
$101k - $158k
$128,874
$105k - $164k
$133,909
$86k - $134k
$109,805
$85k - $133k
$108,338
$82k - $128k
$104,289
$83k - $130k
$105,969
$89k - $139k
$113,650
$80k - $124k
$101,428
$86k - $134k
$108,959
$94k - $146k
$119,254
Source (https://www.salary.com/tools/salary-calculator)
Salaries across the United States can fluctuate significantly (up to 23%) based on where the job is
located. Average salary variations are fluid due to several factors that affect the salary range within a
specific region or city. Such factors can include labour market specifics and average cost of living.
While many people assume pay differentials are the same as adjustments for cost-of-living
measures, high (or low) living costs in an area may only have a moderate impact on pay levels. Salary
levels in geographic areas relate more specifically to items such as the rate of unemployment and
number of qualified labourers in the area (supply and demand). However, analysing all of these
factors separately to determine appropriate salaries based on geography can be time consuming,
especially when considering multiple markets and multiple positions.
Even with all the fluctuations, employers can still make sense of the ever-changing differences by
comparing aggregated national data against a specific location to determine an appropriate
workforce compensation strategy in that area.
In San Francisco, California; in general, positions are pay with 23% more than the national average,
in Columbus, Georgia; positions are pay about 10% less than the national average.
Companies use location-based salaries to keep pay equitable. Employees in the same position
receive similar take-home pay because their salary accounts for local tax rates and cost of living.
Factors to consider
Determining location-based salaries is a complex process. Businesses must develop unique formulas
that account for not only local expenses and market rates, but also employees’ skills and experience.
To strike this balance, location-based calculations incorporate some combination (but not
necessarily all) of the following elements:
Market rates: The range of pay for a specific position in a local area and/or in the country as a
whole. Companies determine each role’s market rates by using salary research tools like Pay Scale
and Glassdoor.
Experience: Businesses evaluate employees’ education and skills and the length of time employees
have spent in their positions (or similar positions) to determine whether they should be paid above,
at, or below the market rate.
Cost of living index: A cost of living index is a measure of an area’s core expenses—including
housing, transportation, meals, utilities, and more. The tool Number breaks down typical costs and
index figures for cities all over the world, allowing companies to compare employees’ cost of living.
Income tax rates: Companies may consider giving international employees who live in countries with
especially high tax rates a slight salary boost. However, calculating U.S. salaries based on income tax
rates likely is not worth the effort. The calculations would be difficult and tedious because
progressive structuring is different in each state.