There's this thing people say all the time in New York and other expensive cities: If I could move somewhere cheaper, and keep my income the same, I'd be much better off.
Alas, in places where the cost of living is lower, pay tends to be lower as well.
So what you really want to know is this: How much do workers make in different cities? And how far does that money go in each city?
Find out here: http://www.npr.org/blogs/money/2014/05/20/313131559/how-far-your-paycheck-goes-in-356-u-s-cities?ft=1&f=93559255
the key is to get a company in Jacksonville (or other inexpensive place) to match your pay from one of the expensive cities.
^^^Yea that's where people make $$$$. I knew of transplants from NYC and SF (where the pay is really only now catchhing up btw) who moved to Atlanta and kept their pay. Also, having lived in 2 very different kinds of city, I can attest that your pay goes a lot further in a cheaper city, no matter how many "studies" come out.
What's more interesting to me is not "what the median income feels like", but rather the hit to the median income.
NYC and SF both have a 22% hit
DC has a 21% hit
LA has a 20% hit
Then you have Dallas/Houston and they both have only a 6% hit.
Hot Springs, AR sees a huge inflation on what its median income feels like, so that yes the median is only $25K, but feels like almost $28K.
I'd imagine Jax is somewhere around the flatline where the median feels about the same as it is. And that's my takeaway.
A $100K salary in NYC and SF are going to feel more like it's in the $70sK, which doesn't mean much at all in these cities. A $100K salary in Jax will feel like it's actually a $100K salary.
Quote from: simms3 on May 22, 2014, 12:05:31 PM
I'd imagine Jax is somewhere around the flatline where the median feels about the same as it is.
You don't need to imagine it, you can actually type Jacksonville into the box. ;D
And you're absolutely right, the median $28,999 feels like $28, 599.
that was a good article I was looking at that yesterday.
I'd be more curious to see how a modern income compares to incomes in past decades.
According to the study
Jax $28,999 feels like $28,599
Tampa $29,646 feels like $28,315
Orlando $26,327 feels like $25,511
Miami $27,055 feels like $24,440
Atlanta $31,504 feels like $31,254
Charlotte $30,660 feels like $30,845
Nashville $30,375 feels like $30,620
What this study is also flawed at showing is what's attainable.
SF metro median income is $41K and median house price is $668K, a 16x multiple. (San Jose's metro median is $759K because they don't have an Oakland/Richmond with median of "only" $400K dragging it down, ha). Taxes/fees are a whole other bag.
Jax metro median income is $29K and median house price is $143K, a 5x multiple. No state income, low property, low sales, low fees.
I think people are getting a little hung up on how the expensive cities are somehow less expensive, or at least equivalent, to the inexpensive cities. There is no equivalence, you literally need to be a millionaire in some of these cities (metros in CA's case) to have a true middle class or better lifestyle, and salaries aren't THAT much higher. I wouldn't prefer living in an inexpensive, lower quality of life city myself, but in terms of what you can attain, buy, afford, etc it's a world apart.
Most of the rich people in Jax are transplants from CA, NY, MA, DC, etc. People have a hard time eating pay cuts to move to a cheaper place, so often people do keep their former salaries AND they now have a MUCH MUCH cheaper place to live in. That's where wealth is created outside of the "wealth centers" that are the coastal gateway cities.
Quote from: simms3 on May 22, 2014, 01:54:10 PM
What this study is also flawed at showing is what's attainable.
It's not clear if that is actually true. They say
QuoteWhat is interesting about this data set is that it accounts for the things that people actually buy in each city. For example, while owning a car may be way more expensive in New York City than it is in Kansas, car ownership is relatively rare in New York City, so it's not going to figure as prominently in a New Yorker's cost of living.
which implies that lifestyle, taxes, and what is attainable
is factored in, but without any methodology (that I can find), it's hard to say for sure.
That being said, I tend to agree. I think for most people's way of life, they would be better off in the lower-cost locale.
^^^There's a reason home ownership rates are so high in places like Jax and fewer people rent - it's because despite the lower median incomes, mortgage qualification issues, etc, MORE people can actually own a home or condo. The home ownership rate in metro San Francisco is below 40%, for metro Jacksonville I believe it's well above 70%. Even in suburban Santa Clara County (San Jose), the homeownership rate is 58%, and for all of CA it's 56%.
A 1 BR apartment (not a studio, a separate 1 BR) in metro Jax probably averages 800 SF. The same in metro NYC or SF probably 600 SF (and much "cozier" in the cities themselves).
These are precisely the things that aren't measured by this study that are indicators of just how much more expensive other metros are relative to pay compared to a Jax. I think that's a positive on Jax, however, as we have discussed ad nauseam on this forum, low cost isn't everything. The perks of the big cities come at great cost, but ultimately people and companies find these perks to be worth it, at least for a segment in their life.
I just get fed up with studies saying "see, you're better off, financially, in SF or NYC or Honolulu than Dallas or Atlanta or Jacksonville!...or it's not all that different". So misleading it's disingenuous in my opinion. I've even heard people on this forum say that after car expenses it's more expensive to live in Jax relative to income than in NYC! I'm calling total BS on that.
Quote from: simms3 on May 22, 2014, 01:54:10 PM
What this study is also flawed at showing is what's attainable.
SF metro median income is $41K and median house price is $668K, a 16x multiple. (San Jose's metro median is $759K because they don't have an Oakland/Richmond with median of "only" $400K dragging it down, ha). Taxes/fees are a whole other bag.
Jax metro median income is $29K and median house price is $143K, a 5x multiple. No state income, low property, low sales, low fees.
I think people are getting a little hung up on how the expensive cities are somehow less expensive, or at least equivalent, to the inexpensive cities. There is no equivalence, you literally need to be a millionaire in some of these cities (metros in CA's case) to have a true middle class or better lifestyle, and salaries aren't THAT much higher. I wouldn't prefer living in an inexpensive, lower quality of life city myself, but in terms of what you can attain, buy, afford, etc it's a world apart.
Most of the rich people in Jax are transplants from CA, NY, MA, DC, etc. People have a hard time eating pay cuts to move to a cheaper place, so often people do keep their former salaries AND they now have a MUCH MUCH cheaper place to live in. That's where wealth is created outside of the "wealth centers" that are the coastal gateway cities.
Completely agree on this. Having grown up with friends in the NY metro area I've had this conversation countless times. Their salaries are 20-30% more than their equivalent job would pay here, but the cost of living is still far greater than what the salary covers.
Somehow they make it work though... roommates, small rent controlled apartments, living in a lesser known neighborhood, etc
Quote from: CityLife on May 22, 2014, 01:35:44 PM
I'd be more curious to see how a modern income compares to incomes in past decades.
(http://www.washingtonpost.com/blogs/wonkblog/files/2013/09/MedianHouseholdIncome.png)
This chart shows real median household income over the past 25 years; that is, the money earned, in inflation-adjusted dollars, by the family at the exact middle of the income distribution.
Headlines about these numbers tend to focus on how we have now experienced a lost decade for the middle-class American family, with incomes back to their late 1990s level. But as the chart shows it's really worse than that.
In 1989, the median American household made $51,681 in current dollars (the 2012 number, again, was $51,017). That means that 24 years ago, a middle class American family was making more than the a middle class family was making one year ago.
This isn't a lost decade for economic gains for Americans. It is a lost generation.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/17/the-typical-american-family-makes-less-than-it-did-in-1989/
Quote from: simms3 on May 22, 2014, 02:30:00 PM
^^^There's a reason home ownership rates are so high in places like Jax and fewer people rent - it's because despite the lower median incomes, mortgage qualification issues, etc, MORE people can actually own a home or condo. The home ownership rate in metro San Francisco is below 40%, for metro Jacksonville I believe it's well above 70%. Even in suburban Santa Clara County (San Jose), the homeownership rate is 58%, and for all of CA it's 56%.
A 1 BR apartment (not a studio, a separate 1 BR) in metro Jax probably averages 800 SF. The same in metro NYC or SF probably 600 SF (and much "cozier" in the cities themselves).
I think what needs to be acknowledged is that the housing markets in SF or NYC are global; it's not in Jacksonville. This article in the
New Yorker points this out:
QuoteThe globalization of real estate upends some of our basic assumptions about housing prices. We expect them to reflect local fundamentals – above all, how much people earn. In a truly global market, that may not be the case. If there are enough rich people in China who want property in Vancouver, prices can float out of reach of the people who actually live and work there. So just because prices look out of whack doesn't necessarily mean there's a bubble. Instead, wealthy foreigners are rationally overpaying, in order to protect themselves against risk at home. And the possibility of losing a little money if prices subside won't deter them, [urban planner Andy] Yan says, "If the choice is between losing 10 to 20 per cent in Vancouver versus potentially losing 100 percent in Beijing or Tehran, then people are still going to be buying in Vancouver."
The challenge for Vancouver and cities like it is that foreign investment isn't an unalloyed good. It's great for existing homeowners, who see the value of their homes rise, and for the city's tax revenues. But it also makes owning a home impossible for much of the city's population.
http://www.newyorker.com/talk/financial/2014/05/26/140526ta_talk_surowiecki
In other words, the local housing market in places like SF, NYC, or Vancouver becomes detached from the local pay scale.
And while true to a degree, are you saying that makes these cities more affordable as a whole or not to American citizens living in them full time?
My whole point is that these graphs putting Danville, IL's COL even in the same stratosphere (or standard deviation) as a New York or SF is as absurd and disingenuous as it gets. Stephen tried to make the claim in another thread that living in a big city with transit was actually more cost effective than living in Jacksonville with a car. No. It's worth it, the cost, imo, but no, not on the same level. And even in NYC, 45% of residents own at least one car. In SF 68% of residents own at least one car. And car owners in NYC and SF are taking transit. So take SF, the city (forget the Bay Area metro). A huge majority of those car owners are paying absurd prices to keep a car in the city, AND they pay for transit (which is $64/mo for Muni, A LOT more if you have to rely on BART or Caltrains), AND they are paying the absurd rents or mortgage, AND taxes all across the board are exponentially higher (there basically are NO taxes in FL, lol), AND pay is only ~20-30% higher, maybe. Talk about squeezed...that is WHY people from CA and NY move to FL, TX, TN, etc.
A more accurate chart would joke that in Jax you get paid $20K only, but you get to keep all of it! In NYC you get paid $30K, but we'll let you keep enough for a new LCD TV and a night out on the town :)
There are FAR more rich people in NYC and SF than in other cities, which may distort the image, but being middle class in either city has to suck badly. Jax is actually perfect as a middle class town.
Quote from: simms3 on May 28, 2014, 01:09:20 PM
And while true to a degree, are you saying that makes these cities more affordable as a whole or not to American citizens living in them full time?
No, I'm saying when the housing in a particular city goes global, it throws these comparions out of whack. So, yes, it is absurd to compare a Danville, IL's COL with a New York or a SF, but not absurd at all to compare a Jacksonville COL with an Atlanta or a Denver.
Obviously any kind of comparison like this is going to have it's flaws. But that's not to say they can't be useful for some people looking to relocate from one place to another.