About one in every 48 Bay Area jobs pays more than $500,000 a year — just one obscene statistic from a Nov. 14 report published by the research arm of payroll company ADP.
The report, written by economist Issi Romem, makes the argument that high-paying jobs in the United States are more common than one might think, and the tech-dominant Bay Area has the highest share of those who are paid well. The San Francisco Chronicle published news of the report on Thursday. (The Chronicle and SFGATE are both owned by Hearst but have separate newsrooms.)
Romem, a fellow at UC Berkeley’s Terner Center for Housing Innovation, wrote that to analyze wages nationwide, ADP took anonymized payroll data from July 2023 through June 2024, adjusting it to reflect the areas’ full populations. The technique doesn’t use a random sample, but Romem wrote that it provides “a much more detailed view of top earners than publicly available government data.”
“While just 0.79 percent of jobs in the country paid more than $500,000 per year, that’s well more than 1 million positions,” Romem wrote. “This isn’t just a small handful of executives — it’s a substantial number of professionals found in every major metro across the country.”
Especially in the San Jose-San Francisco-Oakland metro area. Per ADP’s research, more than 2% of Bay Area jobs pay at least $500,000 a year — that’s the shocking one in 48 numbers. Compared to other metros, the Bay Area is in “a league of its own,” Romem wrote. The Bay Area leads the Austin and New York City areas, each of which had just above 1% making $500,000, while the Los Angeles area and the entire United States each had around 0.80%.
The numbers are even more striking when you add a comma. ADP found that in the Bay Area, a whopping 0.54% of jobs pay at least $1 million a year, about double the shares in the Austin and San Diego areas. Still higher, 0.15% of Bay Area jobs pay $2 million or more — that’s one in 666. No matter how you slice ADP’s data, the San Francisco-centric region comes out starkly on top. To compare: There’s a larger share of Bay Area jobs paying at least $1 million than there are paying $500,000 in the Las Vegas area.
Romem’s explanation for the Bay Area’s salary “exceptionalism” will be familiar to anyone who lives in the region. Huge, stock-market-driving tech companies such as Meta, Google, Apple, and Nvidia form a nucleus for tech talent. He argued that “tech’s dominance” shapes high-wage hubs because tech workers have fewer productivity constraints than the patient- and client-focused doctors and lawyers of the world. Tech giants, he wrote, can reward star employees with “extraordinary compensation.”
Thanks to stock market gains at huge tech companies, some stock-compensated workers have seen particularly massive wages in 2023 and 2024. SFGATE reported in November that California’s Legislative Analyst’s Office shouted out “four major technology companies” for providing almost 10% of the state’s withheld income tax.
Another key reason for ADP’s high percentages of big earners in the Bay Area is just math: Fewer people make less money. Romem blames the region’s sky-high housing costs for pushing out low- and middle-income residents and making the region less attractive to potential newcomers. Romem also noted that the increases in remote work may have driven middle-income workers, in particular, from the Bay Area.
Work at a Bay Area tech company and want to talk about pay? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.