Civic Analytics

Approximately 148,000 software developers were employed in the San Francisco-Silicon Valley corridor in 2019, according to new data from the Bureau of Labor Statistics, representing about one out of every ten software developers employed in the U.S.

The highest-earning developers in San Francisco and Silicon Valley are now commanding wages above $200,000 (top 10%), average home prices are north of $1 million, and average rents are well above $3,000 per month. As a result, companies have been expanding footprints in other markets and some key investors have turned their attention and their money to the “rise of the rest.” But where should they look?

As noted in our earlier look at musicians, the BLS data covers full-time and part-time employees; self-employment could increase these figures considerably. That said, of the thirty metro areas with 10,000 or more employed software developers in 2019, the greatest concentrations of jobs were found in the San Jose metro area, with a location quotient of 7.50, followed by other well-established tech hubs in Seattle (3.72), San Francisco (2.78), Raleigh (2.34), Washington DC (2.32), Austin (2.28), and Boston (2.06).

We are all familiar with those leading tech regions by now from reading the ubiquitous best-of lists. Still important to keep track of as regional analysts or chamber of commerce employees, but well covered ground. So, let’s play recruiter. Many recruiters have access to sophisticated data platforms (Indeed, Emsi, etc.) for “real-time” analytics on labor supply and demand conditions based on company job postings and candidate resumes, but publicly available data can yield valuable insight, too.

To demonstrate, let’s start by filtering the BLS data as follows:

• 10,000 or more employed software developers (30 markets)
• LQ of 1.10 or greater (i.e. 10%+ more concentrated than U.S.)

My thinking here is that most recruiters probably have a threshold for critical mass. Our threshold of 10,000 is likely too small (or considered too small) to draw attention from many larger tech firms or recruiting agencies, but let’s go with that to see if it reveals any smaller areas that are flying below the radar. Let’s also abide by the rules of economic clustering and assume that the knowledge spillovers in markets with greater concentrations provide workers with skill advantages. Again, our threshold of 10% is probably too low, but let’s be conservative.

Now, as for pay, most regional comparisons would look at differences in average or median wages to get an idea of the “typical” worker. But let’s assume our Silicon Valley-based client is scouting locations for a satellite office and wants to know what to expect in wage demands from the highest-earning developers in other markets.

So, one more filter:

• The high end of the wage scale for developers (BLS publishes the 90th-percentile wage) must be at least 20% lower than the 90th-percentile wage for developers in Silicon Valley.

Applying those filters, here is the list that emerges:

Indianapolis, Tampa, and St. Louis are not far behind, each with more than 10,000 employed developers, but a LQ of less than 1.10.

Some of these smaller and/or overlooked markets for tech talent may be dominated by one or perhaps a few larger employers, but they are worthy of closer examination if you are in the market for developers.

We can quibble about the “live” portion of Austin’s moniker, but when it comes to the concentration of musicians, agents, and related industry jobs, there is no debating it: Nashville is the music capital of the U.S.

According to new data from the Bureau of Labor Statistics (BLS), approximately 1,800 musicians and singers, or about one out of twenty in the U.S., were employed in the Nashville metro area in 2019, ranking third nationally. More musicians and singers were employed in New York (6,700) and Los Angeles (3,500), as you might expect given the size of those markets. But the greatest concentration, relative to how many musicians and singers are employed nationally, is found in the Music City. Musicians and singers are six times more concentrated in Nashville compared to the U.S., a location quotient of 6.34, for the economists. It’s less than half that in New York and Los Angeles.

The BLS data compiled from payroll records includes full-time and part-time workers. Self-employed musicians and singers might increase the total in Nashville by thirty percent or more.

Here’s the same table for agents and business managers, although BLS does not release full data for Los Angeles, presumably the top market, for what must be a confidentiality issue (i.e. if one company accounts for too large a share of all employees in the occupation).

Complete list of occupations for Nashville is linked here. Austin is linked here.