All of these articles only matter if you want to live in places that people don't want to live in. That's why rents are so cheap. If you're in London, SF, New York, etc, it doesn't really matter. Also some of these cities have low averages (like New York given the size of the boroughs) but don't reflect the reality of where people want to live.
Even the most expensive of European cities are cheaper than SF or NY. That's scarce comfort when the difference in rent is 30% but the difference in salaries is 2-3x.
Your first point is raised in some form nearly every time this comes up. But what is forgotten is the value of living in these more expensive places. $75k in NYC/SF may buy you less, but you get more free things of value, in the form of quality peers, access to eduction/investment, etc.
It's only an anecdote, but: My income would be the same regardless of where I live, and I'm pretty sure my choice to live in NYC provides me more happiness than most other possible choices.
Even housing to some extent, from what I can tell. The Bay Area ain't cheap, but rents aren't like London or Paris, either. (Well, maybe NYC rents are.)
But you're comparing the rent in a small part of one city to the average rent for an entire city. One could cherry pick the rent in a comparably small neighborhood in San Francisco (the Mission, the Marina) and find it even higher than in Kendall Square.
The rent in a handful of cities. There are plenty of places in the US (both urban and not) where $1K or so per month will get a decent apartment. Yes, there is a lot of tech concentrated in the expensive cities but the same could be said of other countries like the UK. Of course, there are cheaper places in the world to live but then you may be looking at remote work or lower salaries and the same logic applies in the US.
Rent prices in the Bay Area, Seattle, LA, NYC, and other high minimum wage cities beg to differ. As a percentage of monthly minimum wage earnings I'd bet rent comes out as higher in high minimum wage cities than low wage cities.
While low expenses are a good thing, I've learned the hard way I'd much rather pay higher rent to live somewhere I am happy, than to halve my expenses and live somewhere not as nice.
On the other hand, I think I'd appreciate almost any of the cities on this list.
It's not really misleading, the index never pretended to adjust your assets for the local cost of living.
It also matters in a real sense. Who do you think is better off in absolute terms? Someone who owns a paid-off 200m^2 apartment in London, or someone with the same size apartment in whatever dirt-poor country you could name?
The person with the apartment in London could sell it and move to a cheaper country (or even a small town in the UK) and be relatively wealthy, but the reverse isn't true.
You're not poor in any meaningful sense compared to the rest of humanity just because you're struggling to pay off your monthly rent on your penthouse in Times Square.
I love seeing so many people re-package a news piece based on numbeo's cost of living model which is incredibly flawed and doesn't account for the wide variance of the cost of rent depending on whether one is single, is willing to live with roommates, is willing to deal with a longer commute, etc.
Trying to develop a salary + cost of living model that doesn't take into account one's personal priorities and preferences is foolhardy. And the piece Hired wrote did exactly that.
News flash: not everyone who lives in NYC or SF is paying $3000 a month in rent. Many of my friends in NYC are paying $800-1200 for a room in Brooklyn with a 25-35 minute commute on the subway. My friends in SF tell me that they pay more but certainly in the 1000-2000 range not the 2000-3000 range that's always quoted.
Get a significant other and move in together and you can split that in half.
But yes, if you want to live alone, 5 minutes walk from Mission Dolores park in SF or bring a family into Palo Alto then the bay is the worst paying place for you as a software engineer.
On the other hand, if you're willing to commute, or willing to have roommates, cook at home instead buying into the myth that you _have_ to go get brunch at some $12 avocado toast cafe, then you'll likely save more money in the long run in SF or NYC than in the Midwest, and yes, after cost of living and after tax. Unless during your job search you find yourself in the enviable position of finding salary offers in the midwest that are very close to the same salary offers you get in the high COL cities. If you do find that though then by all means live in the midwest. And those situations do exist but it's just that there are far fewer $100,000 jobs in Des Moines, IA than in Brooklyn, NY.
What?? San Francisco has the worst rent in the world, excepting Hong Kong. It's 600 dollars more a month than the average in New York. 2000 dollars more than Chicago... That's entirely due to the lack of high rise housing.
If you move to San Francisco, you should know that your money isn't going to go as far; conversely if you move to Tulsa you should reasonably be able to take advantage of the low cost of living to build up your savings. If you're residing in Tulsa and still only just surviving, you're not earning a living wage.
Then there's the fact that besides food and rent pretty much everything we buy nowadays is nationally priced - amazon doesn't give you a discount for moving to a low cost of living area; and you don't get to pay lower taxes because cost of living is higher.
But beyond all this, the disparities arise almost exclusively because of a few outliers - maybe 5% of people in the country can live comfortably on less than $20k/yr and less than 10% require substantially more; the vast majority of Americans are close to the average.
Really? I didn't notice this at all while living there. And it's also hard to peg someones rent with respect to their salary because some people chose to live beyond their means while others would potentially live 'cheaply' in order to save enough to buy a place.
Of the factors that I consider when I decide what city I want to move into, apartment size/price is pretty far down on the list. Those who weight those things differently will of course not live in those sort of places. Neither is more correct than the other, nor does one require more reevaluation than the other.
Housing would make a difference in high cost-of-living areas, such as SF, but the others are probably rounding errors with what is, after all, fairly high salaries.
You can't maintain the same level of housing no matter where you are. That's what my example comparing my home town (backwoods Connecticut) with San Francisco is about--it simply doesn't make any sense at all to compare a hundred acres in rural farmland with the equivalent housing situation in a major metropolis. Cost doesn't really enter into it.
The type of housing you can afford is a quality of life issue as much or more than it is a cost of living issue. If you live in San Francisco or New York, you accept a smaller living space than you'd get elsewhere. In return, you get access to nightlife, concert venues, and other amenities that can only be had in a densely-populated area.
If living on a hundred acres of woodland is important to you, you will not live in San Francisco. If being able to bike to work is important to you, you will not live in Los Angeles. If staying out of the cold is important to you, you will not live in Minneapolis. Money won't buy you any of these things.
At some levels, it may seem that it's just an issue of money. You can, of course, buy a detached, single-family house in San Francisco. It'll cost you millions, but you can do it if you're rich enough. Attempting to paint this as a difference in cost of living, however, is simply disingenuous--the detached home in San Francisco is the local equivalent of a mansion in my home town. It's not equivalent, any more than hiring Michael Franti to make a personal trip out to Connecticut to play for you would be equivalent to catching a show at a local concert hall.
And, finally, it's important to remember that unless you're living entirely hand-to-mouth, not all of your income goes to living expenses. If you're in the well-paid engineer club, then hopefully only a relatively small portion of your income goes to living expenses. Moving from a cheap location to an expensive one may increase that portion, but it doesn't make any sense at all to multiply your current income by a constant factor to determine the "equivalent" in a different location. That's what that calculator does, and it's deceptive and wrong.
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