What affects Wages?
Various factors affect wages. Some of these are the company or organization’s profitability, demand and supply, prevailing market rates, cost of living, government regulations, cost of training, and stature in the job. Government regulations affect those working in agencies on a national or state pay scale. The General Schedule (GS) Payscale covers more than 1.5 million civilian employees of the U.S. government. As of 2021, there are 54 localities or pay areas across the nation – each with a separate Locality Adjustment. At the top of the list is San Jose-San Francisco-Oakland, California. This geographical area has an adjustment of 41.44% because of the higher cost of living (COL). The COL impacts salaries as companies strive to compensate for the higher expenses to live in these areas. Consequently, your wages do not go as far as living in Des Moines, Iowa, where the adjustment is 15.95%. This statement rings true when you look at a comparison of the average home prices below.
Health Managers by State
In the healthcare management and administration arena, the U.S. Bureau of Labor Statistics (BLS) reports the occupation group as Medical and Health Services Managers. As of May 2019, the BLS stated the median wage as $100,980 with a Bachelor’s degree and less than five years of experience. Out of a total of 422,300 in the profession, 125,230 work in General Medical and Surgical Hospitals. The mean pay in these settings is $125,180. A distant second is those working in Physicians’ Offices with 48,780 at an annual average wage of $108,750.
Looking at the median pay by state, Washington, D.C. leads the category at $150,040, followed by New York at $147,000. The next three of the top five vary slightly: Hawaii ($133,320), California ($133,040), and Massachusetts ($132,960).
City and Surrounding Area
Further analysis of wages by metropolitan area concurs with the premise that the COL is highly influential. Not surprisingly, New York-Newark-Jersey City areas have the top median salary at $144,370. Boston-Cambridge-Nashua is second at $139,240, followed by Los Angeles-Long Beach-Anaheim at $132,070; Washington-Arlington-Alexandria is third with a median pay of $131,710.
Another statistic the BLS provides is the metropolitan areas with the highest concentration of employees in medical and health services management. These figures can differ considerably from cities with the best wages. For example, Iowa City has 6.85 employed in this occupation per one thousand jobs. Here the median pay is $99,440. On the top ten list by concentration, the best wage is in Killeen-Temple, Texas, at $118,250 with 5.31 jobs per thousand health managers.
Where you might receive the highest income can be offset considerably by the cost of housing, groceries, rent, and gas prices. These expenses and other costs quickly eat into a better wage. In Killeen, for example, the average home is $229,121, and rent averages $718 per month (PayScale). Compare this to living in Cambridge, Massachusetts, where the median single-family home is $1,109,025, and rent is $3,474 per month.
According to the BLS, Little Rock, Arkansas, has a median salary of $96,080, and Cheyenne, Wyoming, is at $94,550. If a health administrator is trying to decide between the two cities, which city has a lower housing cost and rent? According to Redfin, the average home is $201k in Little Rock, whereas, in Cheyenne, the median home price is $254k, and a one-bedroom apartment rents for $867, which is comparable to Little Rock. A significant difference exists for the home buyer who may get more for the money in Little Rock.
Unless you have the education and experience to reach the executive ranks in health administration, your salary will probably not offset the costs to live in San Francisco. A two-bedroom, two-bath condo could cost as much as $1,125,000 for only 968 square feet! Too much space? What about a 491 SF unit sold on February 12, 2021, for $575,000 in this city?
The BLS reported that Santa Cruz in sunny California has the highest wage at $163,280. Before putting your house on the market or canceling your lease, keep in mind the average home is $1,189,000 (Redfin). The good news is that house prices rise 41.5% year-over-year – if you can afford it, the house will appreciate well.
Whether starting your career in health administration or having years of experience, several elements may impact your employment location choice. Large metropolises like Chicago, Atlanta, Los Angeles, Seattle, and New York all have a considerably higher living cost. An enticing salary may not offset the excessive drain on income to maintain an affordable lifestyle.