Why do salaries differ from state to state

Generally, the more technical an industry is, the better paid its managers are. Varying education levels also contribute to big wage differences for these workers. For example, some jobs that typically require a masters or doctoral degree at the entry level may be open to natural sciences managers who have advanced education.

These jobs are likely to pay more than other jobs for natural sciences managers that require a bachelor's degree or less education. And sales managers can boost their wages through bonuses or commissions made by meeting performance goals.

Many sales and financial workers are paid a commission, usually after selling a specific amount of goods or services. A commission may be earned in addition to or instead of a salary and can lead to big differences in pay among workers in the same occupation. Real estate brokers , for example, earn most of their income from commissions on property sales—usually a percentage of those sales—so those who sell expensive properties or have higher sales volumes are likely to earn more than those who don't.

See table 4. In addition to performance-based pay, factors such as experience, industry of employment, and education level may also play a role in large wage differences for sales, business, and financial occupations. For example, management analysts who have several years of experience often command high pay as they take on additional responsibilities, such as overseeing teams of other analysts.

The clientele that an industry serves may also influence wage potential for workers in an occupation. And the diverse education levels of supervisors might lead to variations in their pay. For example, those who supervise wholesale and manufacturers' sales representatives of technical and scientific products may be more likely to have a bachelor's degree or higher-and may earn more-than those who supervise telemarketers.

Varying education levels is among the reasons for big wage differences in certain science , math , and engineering occupations. Jobs requiring more advanced education are more likely to have higher pay. Some geoscientists , for example, have a bachelor's degree, and others have a master's or doctoral degree.

Credentials, experience, and industry of employment might influence wages as well. Actuaries , for example, must pass a series of exams over several years to become fully qualified. When they first start out, they usually work as trainees and have lower wages than experienced actuaries. Gradually, trainees receive higher salaries as they gain credentials.

Even highly educated workers in these occupations might make less if they are in entry-level positions. For example, biochemists and biophysicists who have a Ph. And in some occupations, wages vary by industry. Wages for occupations related to law , teaching , and air transportation vary widely due to a number of factors.

Job tasks for these workers vary by levels of authority, from handling simple infractions or disputes to presiding over complex legal cases on appeal, which may contribute to wage differences. Additional factors affecting wages for the occupations in the table include worker qualifications, industry of employment, and job location. To qualify for higher paying jobs, for example, airline and commercial pilots usually need more experience and credentials than lower paying jobs require. Within educational services, the public sector pays more than the private sector for some teaching jobs.

How it works Why we're different Use cases Pricing. How it works Why we're different Role by role News Pricing. Click to see how far your salary can go. About Workforce. Also, look at the parking lot to see what kind of cars they drive, as cars that are in better condition — not necessarily those that are new, but those that look like they are cared for adequately — indicate employees receive enough pay to keep their cars in nice shape.

One more option, if possible, is to ask about what parts of town the employees live in; companies where lots of employees live in more expensive areas of town or who own their own homes likely pay well. A published author and professional speaker, David Weedmark has been a hiring manager and recruiter for several companies and advises small businesses on technology.

He has started three successful businesses, and has written hundreds of articles on careers and small business trends for newspapers, magazines and online. By David Weedmark Updated January 11, The states with the lowest cost of living in , from the lowest to highest were:. Related Articles. Research shows that workers value amenities like pleasant weather, clean air, low crime, and proximity to cultural attractions. Over the past few years The Hamilton Project has released interactive web tools to help workers—and particularly young adults, from college hopefuls to recent graduates—make decisions regarding their education and careers.

These web tools and associated reports also help illuminate workings of the labor market and their implications for educational investments, which in turn are vital for promoting broadly shared economic growth. In our newest interactive feature, Where Work Pays: Occupations and Earnings across the United States , users can see how typical earnings in occupations vary across metropolitan metro and nonmetropolitan nonmetro areas in the United States.

They can also see how earnings by occupation change when adjusted for age, cost of living, and state and federal income taxes.

Geography matters a great deal for earnings, as well. The United States can be divided into metro areas cities and their surrounding areas as well as state nonmetro areas the parts of a state not included in any metro area. There are metro areas included in this analysis and 47 nonmetro areas; almost every state has one nonmetro area in our calculation.

How much does location matters for earnings? After controlling for demographic differences, workers in the top 30 locations earn an average of 20 percent more than the median worker in the United States and 37 percent more than workers in the bottom 30 locations; median annual earnings are substantially higher in some locations than in others see figure 1. Still, given the huge variation in individual earnings, location can only explain so much of individual variation. A further adjustment for location accounts for another 1.

There are some occupations with relatively little variation in earnings across locations, but where you work has an impact on what you earn for the vast majority of jobs.

Perhaps surprisingly it is not always the location with the highest overall earnings that has the highest earnings for particular occupations. For example, while San Francisco—Oakland—Hayward, California, ranks fourth out of all locations in terms of overall median earnings, it ranks below the national median for 9 percent of occupations.

Conversely, locations with low overall earnings often feature higher earnings in certain lines of work. Nineteen of the lowest 20 wage locations have at least one occupation paid at the national median or better. Earnings differences within occupations and across locations can be quite large.

Recent work by David Deming and Lisa Kahn suggests that some of this variation within occupations exists because the same occupation requires a different set of tasks and skills in different locations. To illustrate how wages vary within a particular occupation, figure 2 presents median annual earnings for registered nurses, one of the occupations with the largest number of workers, by location.

In appendix figure 1, you can see how earnings increase with age within each separate location. The interactive associated with this report allows users to input any occupation to show median earnings by location and age. How much location matters to earnings—and in which locations a person would earn more—depends on the occupation. To illustrate how earnings vary within occupations by location, for figure 3 we selected 9 of the 20 most common occupations; each vertical line represents the median earnings in that occupation in a particular place.

For occupations with less dispersion, like truck drivers, where you live matters less for your wages. To show how earnings in occupations vary when comparing the same locations, figure 3 highlights six metro areas with median earnings that are all roughly at the level of the median location in the United States. By contrast, occupations such as truck, delivery, and tractor drivers, as well as construction laborers, have a much more condensed distribution, with similar earnings across the six metro areas.