Expensive places like NYC also have folks who commute in from cheaper areas. I lived in Bucks County, PA, with people who worked in Manhattan. I know people who work in DC who live in WV and PA. The are also people who rent a closet near work to sleep in during the week. They get to see their families on the weekend.
Aside from housing and parking, does it really cost more to live in a big city? I’ve spent some time (but never permanently lived in) larger cities. The rent is higher, some make you pay to park your car but aside from that most other expenses are roughly the same. Walmart, medical care, items bought online, food, tuition, etc. are pretty much the same.
Wouldn’t a person who spends $500 a month in rent in Ohio, who moves to NYC and finds they need to spend $2500 a month for something roughly similar find their other expenses are largely the same between NYC and Ohio? Even if rent and parking costs go up by $2500 a month from moving to Ohio to NYC (from $500/month to $3000/month), that comes to 30k a year. Far short of the 116k it should cost extra according to that calculator.
I dunno about all that, Jragon. Minimum wage in NYC is not the same as minimum wage in Kudzu, Mississippi. Even people working under table in NYC are not making the same thing as their counterparts in Kudzu. Welfare benefits in NYC are no way like they are like in Kudzu.
A lot of the people who live in NYC “for the culture” are idealistic young people looking for their big break. They’re auditioning for off-off-Broadway productions between waiting tables and sleeping in a cramped apartment with three other roommates. They aren’t the ones saying their $100K is their “break even” point. They aren’t trying to live the American Dream with the white picket fence and full retirement at 65. They’ve got their own crazy dreams.
There aren’t a whole lot of people who are so specialized that they are shackled to a particular location, high cost of living or not. I would argue that if someone is THAT specialized, they are in a very precarious situation (what are they going to do if they laid off?!) and should perhaps do something about it. What is a lot more common is being unable to find another job somewhere else that pays the same, offers the same benefits, and doesn’t come with shitty trade-offs. It’s risky to start all over again in a new place. So I don’t blame anyone for not wanting to move.
Yeah, I remember reading a joke about New Yorkers spending $3000 a month on an apartment, $400 on shoes, $15 on a martini and always complaining about how poor they are.
The thing is, there aren’t tons of positions that pay six figures in flyover country. My brother and his wife make six figure salaries as middle managers at Proctor & Gamble in Cincinnati. But there aren’t a lot of big corporations out there.
Also, certain professions lend themselves to having to live in certain cities. Finance, you want to be in New York. Tech, you want to be in Silicon Valley or one of the other big tech hubs). You can be a schoolteacher literally anywhere in the country.
No, all costs go up. All you have to do is compare the gas prices in a big city to those in a small town and you’ll see why this is the case.
I know that when I lived in NJ, there weren’t any Walmarts around me. There weren’t any in NYC at the time, either. We had dollar stores and other cheap places. But no major department store where you could find low, low prices for everything. Walmarts are huge. Land is way too pricey in the city proper for a big box store.
The big city lifestyle incurs some additional costs that you don’t find in other places. For instance, you do a lot more walking in cities with good public transit. Which means you need good shoes (or at least an extra pair of shoes so you don’t ruin your good shoes). If you decide to ride a bike to save time, you’ll need to invest in a heavy duty lock. You’ll need to get a sturdy umbrella and nice winter protection, since you’ll be outdoors more. These aren’t major expenses, but they can add up.
The cost of utilities vary a lot from region to region, irrespective of cost of living. When I lived in Miami, I paid five dollars for my water bill every month. Where I live now (Richmond) I pay seventy dollars. I don’t know why it’s like this, other than the infrastructure here is really old and we’re trying to improve stormwater. But just outside the city, they pay almost nothing.
Science positions are the same way, particularly university research positions. There aren’t a whole lot of marine biologists teaching in the Midwest, but you’ll find a ton on the coasts.
Sure I see what you are saying. But It’s not like my choice is between paying $16000 or $500. Property taxes are extremely high in this state and county. Sure I could move to a different state but I wouldn’t have a job there. Yes property taxes are lower in shitty neighborhoods. I could choose to live in Camden. But property taxes are still higher there than I have heard of in certain parts of the country. We also have a 7% sales tax. And a state income tax. And the highest car insurance rates. All things that add up to making 100k being firmly in middle class here. No way in hell does 100k make you rich around here.
Items bought online will cost the same whether you are in Manhattan or Ohio ( and I specify Manhattan because the index for Queens is 159% and Brooklyn is 181%) , but that’s not true for other expenses. It’s not just residential real estate that’s more expensive so doctor’s offices, stores etc will have higher rents. I think most types of insurance are more expensive here as well. Prices have to account for that. There are no Walmarts in NYC. In addition, apartment living in Manhattan is a different lifestyle. There are only a couple of supermarkets in Manhattan that have parking lots , so most people do their shopping on foot or have the groceries delivered ( for which there is a charge). It’s okay to do the shopping on foot, because there’s not a lot of storage space for a 24 roll package of toilet paper. But that package is usually less expensive than the four-roll package.And the same goes for lots of other household items and groceries.
I’m not sure what sort of apartment you can get in Ohio for $500/month and therefore have no idea if you could get something similar in Manhattan for $2500 but I will tell you that my brother-in-law in Rochester NY (100 on the Census index) has four times the property and at least twice the house I have in Queens, but his house is worth about half what mine is. If you look on the Census index, it’s broken down by categories - housing, groceries ,utilities etc. Housing accounts for 30% of the score. Akron is 99 for housing and Rochester is 94. Manhattan is 386 and Queens is 230.
Living in the city is without question more expensive. A big expense that hasn’t been addressed is childcare. In DC, center based care for an infant starts at $1,900 a month. This is not for the French-Montessori immersion academy downtown. That’s the price for a basic daycare in a strip mall.
Then there are little things. A rotisserie chicken at my Giant costs $8.99, while the same bird in the burbs is $4.99. I live next to a great little take out place that will sell you a $9.00 grilled cheese sandwich- and I don’t really have alternatives for a quick lunch.
But there are also the hidden costs. Cooking sucks when you have a tiny galley kitchen with no dishwasher, and hosting parties suck when people have to sit on your bed to have a place to eat, so you meet out more. You can’t fit a treadmill in a small apartment, so you get a gym membership. You can’t get diapers at Target or Walmart, so you pay inflated prices at CVS or pay shipping online. Even things like buying some shelves from Ikea becomes alt of extra expenses.
There is a lot to make up for it and in most cases it’s a choice (in my case, my husband and I have long commutes to outlying cities in opposite directions, so we can’t just up and move to the outskirts). But yeah it gets pricey.
But, of course, most people who work in DC don’t live there.
Well, okay, I didn’t account for the fact that low-paying jobs plummet to at or below the cost of living wherever you are. So point on that one.
This is more of what I’m talking about. In terms of sheer cost of living around them, somebody who’s an expert on the Mohawk tribe is less “lucky” than someone who is an expert on the Hohokam, simply due to the cost of living in the sane operating regions of such research. Someone who’s an expert in American desert ecology is pretty much beholden to somewhere in the Sonoran desert. Technically you can find a position somewhere else if you travel a lot, but it’s not going to be easy to find one.
Even outside of that, there are subspecializations that can kill you. A web programmer can find work wherever, so living in a high cost of living area is largely a choice. But if your work is in digital signal processing, or bioinformatics, or computational geometry, you have fewer options. There ARE options, but even though there are firms and government facilities dotted here and there (there’s a couple of companies in high need of DSP work in Tucson, AZ for instance), you’re only going to reliably find a glut of jobs in a couple places. You don’t really have wide open options. These aren’t fields whose specialization is so narrow they have to worry about being laid off, but they are jobs where finding a job if you don’t want to live in a very specific class of places is difficult.
All I’m saying is that I think mobility is largely tangential to wealth. Rich Hollywood actors are somewhat tied to Hollywood (save vacation homes and such, natch); middle to upper-middle class desert ecology researchers are tied to the desert. Schoolteachers can go wherever, as can doctors and web programmers. All of these are at wildly different levels of affluence, but also have wildly different numbers of places they can live and still reliably find work.
We can, of course, argue that richer people still have more mobility. Obviously people who live in 90210 could afford to live in The Projects, while the reverse isn’t true. That’s fair, but I felt like what people were saying is that living in a high cost of living area vs a low cost of living one is always a choice. While at a pedantic level, that’s true (you could always totally give up your career and try to live in a new place waiting tables and selling oil paintings), I don’t think it’s a good analysis of the situation that people below the “filthy stinking rich” line are making a choice living in a high cost of living area.
I’ve spent a decent amount of time in Chicago and San Diego (and I currently live in a large midwestern city, but it isn’t a high priced one). The rents were higher, but aside from that I still just didn’t notice prices in general being much higher. However I was a visitor for a few days to a few months there, not a resident. I didn’t partake in medical care, daycare, etc. The grocery stores were about the same price as stores in smaller towns I’ve visited. However in Chicago we had to travel to the outskirts of town to get to the good grocery stores, where land was much cheaper.
A good pair of shoes costs about $100 and will last a few months, so maybe $400 a year. Same with winter clothes, a lock, etc. it would come to a few hundred. Restaurant food is not much higher from what I’ve seen. I have no idea about daycare like **Sven **is talking about, so I can’t comment on that.
Gasoline is higher, but I’m assuming part of that is state taxes. Evenso, gasoline price differences will probably only come to $1000 a year. Same with utilities, even if water is an extra $50/month, that adds up to $600/yr. Far short of the idea that a lifestyle that costs 100k in Ohio will cost 250k in NYC.
Looking at the US Census consumer price index, comparing Queens or Brooklyn to Akron, much of the cost difference is housing. Everything else is only about 20-30% more expensive (except utilities which are about 70% more). That sounds more realistic.
http://www.census.gov/compendia/statab/2012/tables/12s0728.pdf
But it matters if you are comparing 30 vs 75k in income vs 100k vs 250k in income. That housing price jump from $500 to $2500 is going to be huge if you are making 75k, if you are making 250k it is a minor expense.
True, but the question I’m addressing is if it actually is more expensive to live in the city- which is yes.
Yes, it does depend heavily on where you live. I live in Indiana, where I’ve made over $60k since 2006, and over $100k since 2010. That bought me a 2.5 acre property with an older but nicely refurbished ranch house with detached garage and guest quarters. Financed 235k on the mortage. We got lucky on it, seller knew my wife from her job and we did a deal with no realtors, last year when rates were low and the market was turning around. Actually sold my old place at asking price.
I’ve managed to live comfortably. We have a little summer trailer on a lake up north, a seasonal place, and two older jet skis. We have no credit card debt and only 1 car payment. That car is paid for by my employer. It’s a Buick, btw, nothing fancy…Insurance is not an issue, thankfully. We save by growing vegetables in the garden, buying off label clothes, etc. I’m putting back as much as I can towards retirement. And I’ve had the good fortune to visit nearly every major city in the country, as well as Rome and Barcelona. We have vacationed to Hawaii twice, and St. Lucia last summer. But, I could lose my job tomorrow. My industry is increasingly volatile. I’ve been one of the lucky ones. I wasn’t trying to brag…we aren’t rich but we live fairly frugally and are able to enjoy some extra things. And it helps to live in a “flyover” state with a low cost of living. My sister-in-law and husband live near Boston are looking at a more expensive house that’s over 100 years old and on maybe 1/4 an acre. But, that’s to be expected out East.
Oh and we just had our first son two weeks ago…so things are going to change big time!
New York City throws a wrench into the wages of New York state employees. It’s a big benefit for those of us who work for the state and aren’t in the NYC area.
As has been noted, there’s a connection between cost of living and wages. But state employees all form a single pool as far as wages go. They can’t get away with paying state employees in Manhattan one hourly wage while paying another state employee doing the same job in Plattsburgh an hourly wage that’s half that. So state employee wages are based on what’s essentially the average cost of living in New York state.
The result is that the half of state employees who are living in NYC or its surrounding area are poor. But the other half of us who are living outside the NYC area are doing fine. We’re getting paid high wages but we don’t live in a high cost-of-living area.
Here’s some statistics from a government report:
Median Sale Price of a Single Family Home in Westchester County: $620,000
Median Sale Price of a Single Family Home in Allegany County: $50,000
Monthly rent for a 2 Bedroom Apartment in Westchester County: $1395
Monthly rent for a 2 Bedroom Apartment in Franklin County: $551
Median Real Estate Taxes in Westchester County: $7337
Median Real Estate Taxes in St Lawrence County: $1313
Per Capita Local Tax Collections in Nassau County: $5040
Per Capita Local Tax Collections in Tioga County: $1054
Weekly Cost of Day Care Center Care of 3-5 Year Old in Westchester County: $271
Weekly Cost of Day Care Center Care of 3-5 Year Old in Clinton County: $142
Family Budget for a Three Person Family Nassau County: $53,292
Family Budget for a Three Person Family Clinton County: $35,652
Self Sufficiency Standard for One Adult in Manhattan: $28,702
Self Sufficiency Standard for One Adult in Albany County: $12,302
I think you’ve correctly identified that in the highest price areas like NYC and San Francisco, the increase in housing expenses is disproportionately higher than the increase in other expense types.
I disagree with your conclusions though for 2 reasons:
-
The Census table I’ve been referencing says housing accounts for 29% of the index I’ve been referencing. That fits with my general life experience. Even if it really were only higher housing costs that’s a really big deal.
-
By the numbers other costs are not similar. Grocery items in Manhattan are 50% above the national average. Utilities are 70% higher. Misc. goods and services 45% higher than average. Those are huge increases even if they pale in comparison to the increases housing cost.
Not everything is higher here though. In Manhattan, I know four places to buy books for a buck. I also know over a dozen where I can get really great fresh bread and cold cuts to make nearly a meal for under three bucks, great cheap Chinese, fabulous Indian takeout and four places like Jack’s where I can get good, inexpensive food, clothing, toys and other basic staples. Pick up a copy of a local newspaper and I know I’ll find another dozen free performances in any given week. I know the Staten Island ferry is free as is Central Park, walking across the Brooklyn Bridge and several major museums.
In NJ, I know at least five local church / synagogue upscale garage sales where I can get clothing for my girls each year for under $100 a year. I can get the best pizza I’ve ever eaten for under $16, fresh Chinese noodles at our local market for a buck and an apple farm where we can get fresh fruit each fall. We have ten malls within driving distance and probably over a dozen thrift and dollar stores as well. We also have five really good parks within an easy drive as well as several beaches and lakes.
For the property taxes I pay, my eldest daughter gets seventeen kids in her classroom with sky high test scores. I never worry about her education. FYI, a brief search reveals SIX Wal Marts within fifteen miles of my northern NJ home.
So it is not all bad financially.
Everything is both relative and deceptive. I am flat-out rich based on technical financial statements. My whole family hit it big a few years ago because our insane mineral rights holdings thanks to two of my great-grandfathers. I am a multi-millionaire many times over on paper but do you know how much of that I have access to or control over? The answer is zero dollars right now because it is locked up in trusts and legal protection that have tighter protection than Fort Knxw and I have no idea whatsoever how long it will be until I do see any of it. It could be when I am fifty or even one hundred. Right now, it costs me money to sustain and maintain it and I have no idea how long that will take to sort itself out.
I know, you are thinking, cry me a river but this an actual problem that I have to deal with daily. It represents extra bills that I have to pay, keeps me in constant scrutiny of the IRS and I have no control whatsoever over the situation. I am a one percenter whose money is tied out in assets that I cannot control and get no benefit from. It is the same thing as if someone gave you the Eiffel Tower as a gift but you couldn’t collect any tourism proceeds from it but you are still accountable if someone gets hurt on it.
Keep that in mind when you see the stats about the truly rich. Many of them don’t actually have the money at hand. Right now, I just try to do the right things with my decent job to live a decent life regardless of any future promises. I have found that it is surprisingly difficult to do in the Boston area even with supposedly upper-middle class income.
You remind me of Richard Carstone from Bleak House
My husband has one of those Fortune 500 technology jobs so rare in fly over country that pays six figures (they aren’t that rare, actually - and when you get them your money goes a lot farther - but you have to live in a place where the weather is lousy and wait for traveling Broadway shows and follow the Minnesota Vikings - which is punishment enough I hear). As a result we’ve been recruited many times to live in Boston or Palo Alto or even Seattle - and we can’t make it work. Our “reasonable middle class home” (that includes a bedroom for each of our children, a yard, an office - but which is less than 50% above the Twin Cities median house - no granite countertops or custom cupboards) is simply not even vaguely affordable even with a big raise in any school district we’d want to be in.
My cousin is in a condo in Queens - living a middle class lifestyle on just barely six figures - with two kids - and working in Manhattan. But two kids share a room - even though its a boy and a girl (almost unheard of here). They don’t vacation except to visit family. Its a stretch and a struggle. But then - she doesn’t have anywhere to put stuff - so they don’t tend to buy it.