In our recent series of articles, we’ve explored the impact that your educational attainment can have on your earning potential. That one’s pretty obvious. More education often equals better pay.
We’ve also explored the connection between eating habits and earning potential. This one is a little less obvious, but in the simplest terms, eating better leads to better pay. Likewise, better pay makes it easier to eat better.
But what about the connection between where you live and what you’ll likely earn? How does geography shape your earning potential? Well, the impact is profound, but it’s also quite complicated. The truth is, there are countless overlapping factors from population density, climate, and natural environment to political leadership, state policy, and industry concentration that can have a determinant impact on the job outlook for your region.
While we can’t tell you where your best opportunities await, we can do our best to help you understand the types of geographical factors that can shape your earning potential. After that, seizing the right opportunity is up to you!
[It’s not just about location. Your chosen industry plays a big part in your earnings and job security too! To learn more, check out our list of 10 Recession Proof jobs.]
A Quick Note on Human Geography vs. Physical Geography
It’s important first to note that while geography seems like a fairly straightforward term, there is a great deal of nuance to what it may actually mean. In the simplest terms, geography refers to the study of the earth’s physical features. But geography also refers to the relationship between human activity and these various features. With this in mind, geography is often divided into three branches: human geography, physical geography, and technical geography.
Human Geography
The study of, human geography concerns both the way that human activity impacts the earth’s surface and the way that the earth impacts human behaviors. The underlying theory of human geography is that there is a close connection between human behavior, places, and the surrounding environment.
For instance, human societies that have evolved on coastal regions have historically built communities, economies, and cultures that are directly tied to the water. This may include the emergence of a robust fishing industry, construction practices that protect against natural hazards like flooding and monsoons, and even religious practices that correspond closely to the movement of the tides.
It also means that specific places are susceptible to specific environmental patterns–both those that are naturally occurring and those that are magnified by human activity. For instance, global climate change has intensified the frequency and severity of tropical storms. The lives of those living in tropical coastal regions are directly and negatively impacted by these environmental changes. Moreover, these impacts may be felt more severely by those who are living in such regions and simultaneously persisting on the lower end of the socioeconomic spectrum.
As an example, a poor fishing village in a tropical region may exist below the floodplain, may lack the resources to build homes and structures that can withstand increasingly severe weather events, and may be less prepared to rebuild after a catastrophic storm.
This triangle between human activity, geographic location and environment underscores what is meant by human geography.
[Check out 10 more recession proof jobs in the time of economic uncertainty.]
Physical Geography
Physical geography refers to the field of scientific research dedicated to the process and patterns in our natural environment. A unique cross-section of natural conditions help to shape a given setting including climate, elevation, proximity to coastal areas, presence of natural resources, and more.
It may also refer to the distribution of the earth’s seasons and incorporates study of the earth’s atmosphere as well as the hydrosphere–which is a fancy way of saying the earth’s water–and the biosphere–which is an equally fancy way of describing the sum collective of earth’s ecosystems which, until further notice, is a closed system.
Physical geographers explore the ways that the earth’s many natural systems converge to create certain climates, conditions, environmental hazards, and more.
Technical Geography
It’s worth mentioning that there is a third branch of geography that has grown in academic importance. Technical geography refers to the ways that emergent technology interacts with human behavior, places, and environmental conditions.
Rapid advances in areas like transportation, computer science, and renewable energy have the potential to shape lives for better or worse; for those who benefit from innovation by virtue of their geographical location and those who suffer technologically-powered exploitation as a consequence of their geographical location.
We have also proven both by will and byproduct that our technological activities have the potential to alter the geography and natural environment surrounding us. And in our efforts to create more sustainable technology, we may yet prove that humans have the ability to restore and positively impact our landscape through technology.
The Location Where These Branches Meet
These three branches of geography are not mutually exclusive. Indeed, they are highly interconnected. While each offers a lens through which to think about the connection between geography, environment, and earnings, there will often be overlap and interplay between these frameworks.
Tools like the Geographic Information Systems (GIS) underscore the interconnectedness of the field, offering numerous different ways to explore place geography including its correlation to human activity, natural environment, and technology.
This will be important to keep in mind as we consider the complex ways that earnings and geography can connect here below.
10 Geographical Facts That Can Affect Your Earning Potential
Geography will play a critical role in not only determining how much you’ll make but also how far you can make that money go in your specific location. Perhaps the reason geography is such a consequential factor is because it is really a combination of factors.
Indeed, there are a lot of reasons why geography can shape your earning potential, and a lot of these reasons are closely connected.
1. City Living Costs More But It Also Pays More
First and foremost, it is almost universally true that the best paying jobs will be located in major metropolitan areas. For the most part, the local economies which support the largest array of well-paying job opportunities will be those centering around thriving cities. So at least on a surface level, if you’re using geography to find the best paying gigs, you may want to start with some of the nation’s more dynamic metropolitan areas.
For instance, the Bureau of Labor Statistics (BLS) lists the following among the highest paying metropolitan areas in the nation as of 2022: San Jose, CA (Mean Annual Pay-$112,460); San Francisco, CA (Mean Annual Pay-$94,370); Washington, DC (Mean Annual Pay-$83,900); Boston, MA (Mean Annual Pay-$80,810); and New York, NY (Mean Annual Pay-$78,560).
At first glance, this would appear to make each of these an attractive landing spot in search of your future job. In the simplest terms, the paycheck of a person living in San Francisco is likely to be larger than the paycheck of a person doing the same job in a place like…say…Grand Rapids, Michigan. The Bureau of Labor Statistics, by the way, places the annual mean wage in Grand Rapids at $54,900 for all jobs.
But of course, there’s much more to city living than just your take home pay. It also costs a whole lot more to live in San Jose than in Grand Rapids. This cost of living is an important consideration when you evaluate your earning potential in one location versus another. In fact, using a salary calculator tells us that the cost of living in San Jose is actually 77% greater than the cost of living in Grand Rapids.
Simultaneously, the same salary calculator reveals that across all industries, you would likely only see an average salary improvement of 28% if you were to make this move from Grand Rapids to San Jose. The result, says the calculator, is a negative net earnings of more than $28,000 per year.
This suggests that relocating for a larger salary may not always be the right move, financially speaking. Before you make the leap to a new city in search of greener pastures, do the math. Find out how much it really costs to see those pastures, and whether it makes sense for your career and financial outlook.
[Speaking of expenses, find out how inflation is impacting everyday consumers.]
2. Every City’s Job Market Has Unique Characteristics
In terms of raw numbers, there are more jobs available in big cities. But of course, this only tells a small part of the job market story. The Street notes that numerous other factors can play into the state of employment in a given locale. The Street measured factors like salary data, employment benefits, and overall number of job opportunities alongside factors like job satisfaction, job security, disability access. The accumulated data were used to rank cities according to the quality of their respective job market
Factors such as the proportion of individuals living in poverty, the availability of mass transit, median household income, commute times, and housing costs were taken together to provide an outlook for quality of life when adjusted for cost of living. This data provided the basis for a “socio-economics rank” of each city.
The Street notes, for instance, that when all factors are considered, Columbia, Maryland is a top metropolitan area for job seekers based on its “socio-economics rank.” The Street says that Columbia offers the best pay and quality of life when adjusted for the cost of living.
Salt Lake City, Utah is highlighted as the top job market in the country, offering the best combination of pay, job opportunities, and benefits. San Francisco, which you will recall as both one of the highest paying and most expensive metropolitan regions in the nation, is ranked #3 in the category of job market, and #6 in the category of “socio-economics”. This actually means that those who work and live in San Francisco tend to make enough, on average, to support the high cost of living.
Of course, one of the big takeaways here is that there’s actually a whole lot to consider. Each of these factors plays into the bottom line for your household, and it tells you how much you’ll need to earn and are likely to earn in a given location.
3. There are Fewer Job Opportunities in Rural Areas
Now that we’ve taken a deeper dive on pay rate versus cost of living, let’s take a closer look at the way employment and salary differ in less densely populated areas. First, it’s worth pointing out that by land mass, the United States is almost entirely rural. Crazy, you say?
Well, according to the U.S. Census, roughly 97% of U.S. land is rural. This doesn’t mean that all of this land is used for farming. The Census Bureau defines rural land as areas with low population density, low housing density, and a far distance to travel to the closest metropolitan area. From that perspective, the U.S. is a predominantly rural nation.
But of course, because this land is defined by low population density, that means only one in five Americans–or 60 million–live in these rural areas. By contrast, urban areas make up only 3% of the nation’s landmass but account for 80% of the U.S. population.
That’s not all. Urban areas also see an outsized ratio between landmass and economic productivity. Growth patterns over the last two decades reveal that in a nation dominated by rural spaces, the vast majority of growth is concentrated in our major cities.
An article in the Annual Political Review from 2020 notes that “the largest metropolitan areas (i.e., those with more than one million residents) accounted for 72% of the nation’s employment growth since 2008 and over three-quarters of growth since 2015—even though these areas accounted for just 56% of the overall population. In developed countries, the productivity gap between the most productive 10% of regions and the bottom 75% grew by nearly 60% over the past 20 years.”
This underscores consistent findings that earnings are higher and job opportunities are more plentiful in cities. In a comparison between earning potential in rural and urban areas, the 2015 U.S. Census found that the median household income for American rural families was $52,386. This comes in at about 4% lower than the median earnings for urban households, which was $54,296.
Based on these terms, you can generally expect to earn more in a city than in a rural area. But as you’ll see in the following section, this tells only part of the story.
4. There Is Also Less Poverty in Rural Areas
While it may not pay as much to do the same job in a rural area as in an urban setting, we’ve already acknowledged that the cost of living is likely also much higher in the latter than the former. This is at least one reason that–as the U.S. Census Bureau reports–the proportion of those living below the poverty line is actually notably higher in urban settings than in rural settings.
According to the Census, roughly 13.3% of rural dwellers in America were living below the poverty line in 2015. An estimated 16% of urban residents live below the poverty line. This reinforces an unfortunate reality permeating the American labor economy, and one that we confront repeatedly throughout this discussion. Namely, the gap between pay, opportunity, and living standards for high and low income Americans continues to grow.
Many of our major metropolitan areas offer a stark demonstration of this gap, with both very wealthy and deeply impoverished demographics working close to one another in highly concentrated areas while simultaneously living in sharply stratified neighborhoods.
Such is to say that while economic growth is far less robust, opportunities are fewer, and pay is lower in rural areas, it may be easier for rural-dwelling workers to make ends meet on a lower salary. Even this assessment, however, must be approached with nuance. As the Census Bureau explains, the differences in earnings between rural and urban dwellers may actually vary quite widely according to region.
The Census notes rural households earned a higher median income in the Northeast ($62,291) and Midwest ($55,704) of the United States than did those living in the regions’ cities. The median income was reported as $60,655 in Northeastern cities and $51,266 for those living in Midwestern cities.
On the other hand, Southern rural households earned a median of $46,891. This was significantly less than the median of $50,989 for Southern city-dwellers. Western city dwellers ($58,535) also out-earned Western rural dwellers ($56,061).
This suggests that the gap in earnings, and even the direction of that gap, can vary from one region to the next. But, importantly, the Census concludes that rural Americans are statistically less likely to live in poverty than urban Americans in all four of these regions.
5. Some Markets Are Better Than Others For Your Industry
Before you hit the market looking for jobs in cities with generally high pay or a bevy of job opportunities, there is still the matter of geography as it relates to industry. In the simplest terms, some places excel in specific areas. If your ambition is to row a gondola down a canal while singing traditional Italian folk songs, you should probably move to Venice. If you’re looking to break into the beef business, you might be better off in Texas.
Granted, these are two really specific examples. But the point is, geography can determine which careers ultimately pay the best and which offer the widest and deepest array of opportunities. In fact, it is extremely commonplace for certain industries to cluster their activities in specific regions.
Researchers from MIT found that “there are economic and noneconomic benefits to being close to companies in the same or similar industries. These include being able to access a diverse and highly skilled source of quality workers and something intangible but essential: access to the knowledge people learn on the job.”
Consider the historic growth of Silicon Valley. The concentration of the tech industry in this California region made it the top destination for startups and web developers. Today, it not only remains the nation’s hub for innovations in computer science and technology, but it offers the kind of earning potential that most regions can only dream of. Refer back to San Jose, where residents have among the highest median and average salaries in the nation.
The same is true of other settings where tech-driven activities are concentrated. Cities such as Seattle, San Francisco, and Austin are notable for their robust tech industries. Residents in these cities enjoy access to salary ranges far exceeding the national average, largely driven by steady growth in areas like software development, computer engineering, artificial intelligence, machine learning, and more.
6. Exploitive Industries Impact Some Areas Disproportionately
Of course, the reverse is also true. Cities which struggle to build up high growth sectors like computer technology, renewable energy, or healthcare will tend to offer lower wages in these typically robust job markets. As we will explore in the next section, while a high concentration of tech or production activities can help drive a local job economy, the wrong type of industry concentration can actually have an extremely harmful impact on a local economy.
The aforementioned article from MIT uses the notoriously stagnant Appalachian region of the United States as a case example. Here, researchers note that the physical geography of the area contributes directly to the poverty and limited opportunity faced by its residents. Indeed, the sheer remoteness of those living in Appalachia creates severe limitations on the types of industries providing employment opportunities.
That means the dominant industries have considerable leverage over their laborers. As the MIT article notes, “The remoteness of Appalachia meant there was a lack of markets and population centers, which in turn meant few job-generating alternatives to coal. While the single-industry economy produced low pay and poor working conditions, the absence of information about opportunities beyond the region’s rugged mountains discouraged people from moving. In addition, the coal industry was in cahoots with Appalachia’s political leadership, scaring away other industries that might have created alternative opportunities.”
The result is a region in which opportunity is severely limited and pay is capped, stifling regional growth and impeding the ability of local residents to make economic advances.
A similar type of exploitation might be observed in a city like Flint, Michigan, which was once a thriving center in America’s booming 20th century auto industry. However, as automakers began shipping jobs overseas to cheaper labor markets, Flint and countless other manufacturing-based cities around the U.S. fell into depression and disrepair. Many of these cities are part of what is today referred to as the Rust Belt–a grouping of states which includes Michigan, Ohio, Pennsylvania, Illinois, Indiana, West Virginia, Kentucky, and Wisconsin.
These states earned this less-than-complimentary nickname based on their shared history. Many of these states thrived as American production activities rose and peaked in the 1950s. But as the forces of automation and globalization have shifted manufacturing jobs away from the U.S., many of the regions that once prospered are today a tarnished and rusted ghost of themselves.
Today, these regions still feel the impact of diminished opportunity. Moreover, many of these locales have failed to replace their primary sources for employment with anything resembling their past glories. The Mid-Atlantic and Midwest regions are littered with blighted post-industrial towns that are home to aging populations, decaying infrastructure, and few prospects for the future. Needless to say, the exploitation and departure of the manufacturing industries in these regions has had an absolutely devastating impact on local earnings.
7. Political Corruption and Incompetence Diminish Economic Opportunity
This points to another issue that can profoundly impact your earning potential. Some towns, cities, counties and states are well run, with few bureaucratic inefficiencies, no signs of political corruption, and strong track records for embracing innovation. Other towns, cities, counties and states…perhaps not as much.
Those that embrace ethical practices in their civic infrastructure are more likely to attract forward thinking businesses, to court bright, young professionals, to foster entrepreneurship and to enjoy the economic growth that typically follow. By contrast, businesses and college graduates may be frightened away from cities with a reputation for corruption, or even worse, incompetence.
At the risk of sounding glib, and without naming any names, there are plenty of towns and cities in America that are guilty of both. These places pay for their shortcomings with lost opportunities for economic growth. Unfortunately, these losses are often passed along to the residents. When multi-million dollar infrastructural investments collapse in disarray or the cost of a major urban revitalization project is inflated by shady backdoor dealings, local citizens stand to lose the most, both in terms of misspent tax dollars and squandered opportunity.
On the exact opposite end of the spectrum, those who live in well-functioning cities and states tend to enjoy more proactive and effective economic, infrastructural, and job growth programs. Pay rates will usually reflect this growth.
8. State Laws Can Impact Earning Potential
There are other ways that elected officials can shape your earning potential. Every state has its own array of labor laws relating to pay rate, benefits, labor rights, and more. While federal law supersedes state law in cases where these laws may contradict one another, the nuances in each state’s labor policies can have very real and concrete implications for you.
This is because state-level policies are a direct determinant of the minimum wage. According to the Department of Labor, the Federal minimum wage is $7.25 per hour. States like Georgia–which has a minimum wage of $5.15 per hour. and Louisiana–which has no minimum wage at all, must pay the federal wage. By contrast, the lowest earning residents in the state of California must be paid, by state law, a minimum of $15.50 per hour.
While you yourself may not be earning minimum wage, this minimum threshold is often a bellwether both for the robustness of a given job market and for the political attitude toward earning opportunities for low-income workers. Both may be used to determine just how dynamic the overall labor outlook is for a given locale.
General labor policy outlook in the state can also tell you a great deal. For instance, some states have more progressive policies on the books in support of workers’ rights. This may include more flexible paid family leave and sick leave policies. The presence of such policies, which can help workers maintain their income in the event of a family emergency or illness, can also indicate states where workers enjoy higher job security.
9. Overall Population Density Can Impact Economic Health
Earlier, we noted that poverty rates are higher in American cities even though earnings are lower in America’s rural regions. One reason this is true is because population density can often be a driver of other economic indicators.
According to an article from Harvard’s Department of Geography and Economic Development, “When we identify geographical regions that are not conducive to modern economic growth, we find that many of these regions have high population density and rapid population increase.”
This may occur for various reasons including limited education about or access to methods of contraception, a scarcity of critical resources like fresh water, food, and medicine, and limitations on affordable housing options. Taken together, these circumstances can create highly concentrated urban populations whose size is unmatched by the availability of paying work and opportunities for economic mobility.
So when you consider the economic outlook for a given urban population, take note of the connection between population density and poverty. As the researchers from Harvard warn, not only are opportunities more limited in these settings, but many of these economic challenges will only become more acute in the coming decades.
As the researchers conclude, “much of the population increase in the next thirty years is likely to take place in these geographically disadvantaged regions.”
This suggests that the competition for scarce resources and limited job prospects may only grow worse in such settings. The poverty rate and the gap between rich and poor would also likely grow.
10. Climate Can Have a Big Impact on Your Local Economy
Remember the beginning of our discussion when we touched on the idea of physical geography and how this can overlap significantly with human geography. The lives of human beings are directly impacted by climate, elevation, and the availability of natural resources such as fresh water, arable land, and biodiversity. The presence or absence of certain features can both shape the focus of industries in a given region and the scale of the economy.
As the International Regional Science Review explains, there’s a good reason that many of history’s most successful civilizations are those that have settled in temperate coastal regions or areas with access to major waterways. By contrast, says the Review, “at particular disadvantage are regions located far from coasts and ocean-navigable rivers, for which the transport costs of international trade are high, and tropical regions, which bear a heavy burden of disease.”
This means that some geographical locations simply have a massive economic advantage over others. As a result, geographically advantageous areas are often occupied by those who are already in possession of wealth and resources. Consider the very nature of colonialism during the age of exploration. The wealthiest kings and queens of Europe dispatched voyages to discover, conquer and occupy lands wealthy in natural resources, advantageous geography, and rich ecology. In this way, the correlation between physical geography and economic growth is reciprocal.
That holds true today as well, to the extent that opportunities for employment, job security, and economic mobility are still likely to be most concentrated in cities and regions with these natural advantages.
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We admit, this discussion hardly simplifies the question of where to live. The best answer we can offer is that it depends significantly on a number of factors including the type of work you intend to do, the type of lifestyle you aspire to, and of course, the type of place you can see yourself loving.
But of course, the resounding takeaway from this discussion is that there is just a whole lot to think about when you consider the circular relationship between geography and earning potential.
As you look to build a career and a life for yourself, take the time to truly research your potential destination. From state and local policies to climate and elevation, from the concentration of high growth industries to the availability of natural resources, from urban centers to rural landscapes–the U.S. is a land of opportunity. You just have to know how to look for it.
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Of course, you don’t have to work where you live. In fact, more people are working remotely than ever before. Find out how telecommuting can actually save you a lot of money.