Employees make less working at DC startups

WASHINGTON — Taking a job with a startup company has the potential of big rewards, but it also comes with great risk, and in the District, expect to get paid less.

The District of Columbia’s Office of Revenue Analysis says local startups, like those in other major cities, typically don’t have the deep pockets to pay salaries comparable to established companies, and their failure rates tend to be high.

But, for younger workers, the gamble may be worth it, especially at startup tech companies that could eventually become successful.

In the District, the average monthly salary for all age groups is currently $6,903, compared to $4,224 for D.C.-based startups, meaning the average startup salary is 61.2 percent of all companies.

The salary ratio of startup to established companies is lower only in Manhattan, at 56.2 percent.

Even in cities where startup pay rises closer to established companies, the gap it still significant — at 76.5 percent in Austin and 73.2 percent in San Francisco.

For younger workers, the gap is smaller.

At $3,876, the average monthly salary for 25- to 34 year olds is 73.7 percent of the average salary at all companies in the District for that age group. Young workers willing to risk taking a job at a startup in San Francisco risk the least, with a salary ratio of 95.3 percent, compared to all companies.

By industry, San Francisco and Austin trump D.C. across the board for startup company pay versus established companies.

“The causes could include strong ties to venture capital funding that provide greater financing to startups, or simply stronger competition for young talent among startups in San Francisco and Austin,” the Office of Tax Revenue Analysis says on its “District Measured” blog.

If pay is a motivator, look for a D.C. startup that handles health care and social assistance, where the average monthly salary is 91.9 percent of the average pay at all companies in the District.

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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