[perspectivep]

> So if you make $60,000 in a small midwestern town, that's the same as making $120k in Seattle or the Bay Area.

Not true at all. I made almost that exact jump when moving from the Midwest to Seattle.

You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Sign-on bonuses and stock benefits are common out here but rare in the Midwest.

Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too.

Not to mention you can probably keep most of your salary if you decide to move back to the Midwest.

[ivraatiems]

> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too.

That's actually not true. I'm referring to cost-of-living, which includes housing, gas, food, etc. All the things you list. Here's a calculator you can use to try it for yourself [1]. Using that, if I live in Columbia, MO (which I chose at random) and make $60k, I must make $111k in the Bay Area to maintain the same standard of living.

[1] http://www.bankrate.com/calculators/savings/moving-cost-of-l...

> You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Not to mention sign-on bonuses and stock benefits, which are rare in the Midwest.

That is definitely correct. But you can certainly find companies offering good (signing and regular) bonuses and 401k matching; I did. Stock is much rarer, as you say.

[ryandrake]

Cost-of-living is only one cost to consider.

I also used to work in Nowhere, USA and now work in the Bay Area. While my "cost of living as a percent of salary" is much higher, so is my "salary minus cost of living" which is a more important measurement. To put it into concrete hypothetical terms:

Person A lives in rural Iowa, makes $50K a year after taxes, and their cost of living items (housing, gas, food, etc.) add up to $20K. Person B lives in the city, makes $100K a year after taxes, and their cost of living items add up to $60K. All other things being equal (I know, that's a stretch), who's doing better?

One school of thought is that A is better off because while they're making half the salary, their cost of living is 1/3rd. My school of though says that B is better off because he has $10K more to do things that cost the same as they do for person A: Investment, travel, Netflix, anything you buy on Amazon, whatever.

[tcoppi]

If you can take a job somewhere with more than double your after-tax salary(what you would have to do to go from $50k after tax to $100k after tax) and only double your living expenses, of course you will come out ahead. I don't think that is a common situation for a family unless you either downgrade your standard of housing(smaller, add roommates, less desirable area, increase commute, etc) or are seriously underpaid. For single people it might be more commonly possible. Probably explains why a lot of people seem to come to my relatively high CoL area straight out of school and move away as soon as they start a family.

[perspectivep]

The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I moved.

[cookiecaper]

It really depends on the individual situation.

The biggest cost variance is in housing. In the Midwest, you can get a 2,500 sq ft home for ~1.3k +/- $350. [0] Under normal leasing standards (no more than 1/3rd your income to rent), you can pay that if you have a job in the $50k-$60k range. And that's almost the standard -- big houses and big yards for everyone.

In LA or SEA, you're looking at 2.5x-4x that, which is at least $3500/mo. [1] Under normal leasing income standards, you'd have to have a salary of $140k+ to barely meet the minimum requirements, and that's for a "cheap" rental home. The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day.

(In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one)

If you're a single person or just have a partner, you can probably take a hit and go from a $800/mo 2-bedroom apartment @ $55k to a downsized $1600/mo apartment @ $110k and still make a lot more money than you did in the place with a lower CoL (even after calculating a 30-50% increase in the cost of some goods, like utilities, gas, and food).

However, if you have kids, this quickly becomes impractical, because it's way harder to jump from a $1300/mo home @ 60k to a $3500/mo home @ 115k.

For extra credit calculate the change to net pay based on differing tax laws. This is especially large if you're coming to CA, which has the highest state income tax in the nation at 13.3%. Most Midwestern states have tax rates between 4 and 7 percent. Some of the most populous "flyover" states (Texas and Florida) have a 0% tax rate (and to Amazon's credit, WA does too). [2]

[0] http://archive.is/OKMTb

[1] http://archive.is/8R5aI

[2] http://taxfoundation.org/sites/taxfoundation.org/files/docs/...

[1anh2kqowg]

>(In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one)

I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours. The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth.

[cookiecaper]

>I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours.

Searching for rentals within the actual city limits. Burbs are fine but already addressed; generally you are looking at 1 hour+ commutes before it starts to get into "affordable" range (looking at 1.5x-2.5x the median cost for comparable housing in other metros).

In LA and SEA, it seems it's possible to find housing that's closer than 1 hours' commute for 2.5x-4.5x the national median.

In NYC and SF, it doesn't appear that way -- these areas are so dense that it's not possible to get a 2500 sq ft home within 1 hours' commute (meaning freestanding homes that have a yard, not condos/apartments; such homes actually appear to be so rare within city limits that you'd have difficulty getting them no matter how much money you were willing to spend). That's why I singled them out. I'm talking about a rush hour commute here, the need to get to work to do a 9-5. For example, I know Daly City is only a few miles from SF proper, but that doesn't mean you can get doorstep-to-doorstep in under an hour given the transit conditions.

I've never lived in either SF or NYC so it's completely possible that I'm making an incorrect extrapolation here.

>The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth.

This is a good idea if you can get the timing right.

[1anh2kqowg]

>meaning freestanding homes that have a yard, not condos/apartments; such homes actually appear to be so rare within city limits that you'd have difficulty getting them no matter how much money you were willing to spend

I'm not claiming these homes are affordable inside SF, but they certainly exist - anyone who has spent much time in the city or searched zillow can attest (I would link you if I weren't on my phone). There are three-story single-family Victorians all over the place. The yard is usually in the back, though, as putting one next to city street traffic is a waste of space. There are some gated communities with front yards.

The preponderance of single-family homes in the city is one of the causes of the high housing prices. Most of the apartments/condos are actually subdivided versions of the victorians, because it is not legal to build anything taller. And now you have owners evicting all occupants of a property like this, converting them back into a single-family-home with an open floor plan, giant deck, lots of windows, and asking price in the millions. The circle is complete.

>For example, I know Daly City is only a few miles from SF proper, but that doesn't mean you can get doorstep-to-doorstep in under an hour given the transit conditions.

The BART train from Daly City reaches Montgomery station in 15 minutes. If you can't stand a train you do need to commute in off-hours.

>This is a good idea if you can get the timing right.

Granted, there are possible scenarios where this won't work, but all you need is for housing to appreciate at the rate of inflation over a few decades. If that happens fifteen years after you buy, you can sell and lock in your gains early. It's not so different from putting your 401k in equities when you are decades from retirement.

[coredog64]

> The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day.

I think I've mentioned this before, but when I interviewed at Amazon, the topic of affordable housing came up. I asked the interviewer what was affordable these days, expecting Kent, Auburn, or maybe even Buckley. His answer was Puyallup.

[envyUser]

Same in SF, you can always live in Concord or Richmond!

San Leandro is a steal as well.

Dallas is the best of both worlds, high salary and low cost of living. I'm not a fan of Dallas but I may end up there again.

[voltagex_]

I'm on the other side of the world so I have no idea how realistic this is, but Google Maps says it's around 1 hour 15 by bus each way from Puyallup to Amazon's office at 440 Terry Ave N, Seattle. That's not too bad.

[dgemm]

The person you are replying to has direct personal experience with this, and you are telling them they are wrong by citing an internet cost of living calculator.

[ivraatiems]

I'm telling them that cost-of-living is a valuable consideration when deciding on a job offer in a different city. They suggested that it wasn't (or maybe misunderstood what I was saying).

I'm not disrespecting their particular experience; it's awesome that their move worked in their favor. But I have interviewed for jobs in cities like SF and I have crunched the numbers on their salaries and so I have direct experience, too. Neither of our stories on their own are proof, they're just anecdotes; cost-of-living calculations are the result of lots of hard data.

[perspectivep]

Say you're making $60k with $40k in expenses. Saving $20k.

You move and now make $120k and your expenses double to $80k. You're saving $40k; twice as much. But in reality, not all of your expenses increase that much, and the other benefits (bonuses, matching, raises, interest, etc.) are % based, so the discrepancy increases quickly.

[tcoppi]

Taxes are also percentage based, and progressive at that. Your effective tax rate at $120k is quite a bit higher than at $60k, so you won't be saving double in that scenario because more of it will be going to taxes. Also, the percentage increase of 401k contributions etc. is very easy to calculate out to a dollar value, I recommend everyone do that when comparing salaries(though you have to remember not to consider taxes for those).

I find the idea of overall expenses only doubling for a family moving from OK or MI to a place like Seattle somewhat silly. The vast majority of household budget's largest expense by far is housing. If they want to downgrade their standard of living from a 3-4 br 2000+sq feet house, then maybe it will only double. Otherwise it could easily triple or quadruple, as the original article discusses and evidence for is easily found. Salaries are not 3-4x larger in high CoL areas generally. The difference is pretty stark even starting from an area like Metro DC/Baltimore that isn't exactly known for being cheap, but nowhere near SF, Seattle, NYC or Boston levels.

[majormajor]

I can tell you personally that going TX -> CA 60k->120k I was able to save way more money (in the five figures a year range) despite taxes and despite housing costs in a way that the naive "online cost of living calculators" wouldn't tell you about.

Yes, the square footage of my apartment went way down. Pretty much everyone out here lives in less space, generally it's less a "standard of living" thing than a "that's the norm" thing, but obviously if you really need 2K sqft you're going to want to evaluate things separately.

[plandis]

It's funny you mention taxes. WAs no income tax is an added bonus. I also came from the Midwest and it was a nice perk.

[dragonwriter]

> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same.

Well, perhaps less than double, but still higher overall (except, obviously, stuff on Amazon will probably be the same, as I don't think they've implemented destination-specific pricing.) Gas is definitely higher in California than the national average, and higher in the Bay Area than the statewide average. Vacations will depend on where you want to vacation. Lots of services will be more expensive, because the people selling those services need to make enough money to live in the area. (Similar with goods where locally-sourced labor is a significant factor to the total cost of getting the good to you.)

[nsxwolf]

Since you typically have to wait a year to find out if the promises about raises and bonuses were legitimate, I never factor that into a decision.

[vonmoltke]

> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same.

That is not what I see. Food seems to be about 10% - 15% higher than here in Dallas. Sales tax is slightly higher. Gas is definitely higher (about 20%). Travel from SeaTac is more expensive and less flexible than travel from DFW. I spend maybe $5000/year on online purchases and other things that would be the exact same price regardless of geography.

Everything, with the probable exception of insurance, is more expensive in the PNW than it is in the Midwest. It certainly is not as big a part of the calculation as housing, but it is not a wash.

[perspectivep]

Washington has no state income tax.

[vonmoltke]

Neither does Texas.