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Why Cost of Living Matters
The median income in the U.S. if $52,029. At first-glance, that doesn't seem like alot, especially considering
the insane amounts of money those at the very top make. The
administration (and many politicians) seem to consider a income about
4-5x the median to be rich. Certainly, regardless of where one lives,
making more money, ceteris paribus, results in a higher
standard of living. However, "rich" in one locale is absolutely not,
no matter what anyone else may try to tell you, necessarily rich in
another one.
In order for someone in Manhattan to have the same standard of
living as someone making the national median income in St. Louis,
they'd have to make over $125,000 a year! The cost of housing is 486%
higher in Manhattan than St. Louis, utilities 87% more, groceries 66%
more.
Using relatively conservative assumptions for purchase costs, taxes,
etc, let's assume you can afford about $5,500/month or so on housing.
$250,000 a year in St Louis gets you over 6,000 sqft, 5 bed, 5 bath mansion. $5,500 (or so) in Manhattan gets you a 3 bedroom, 2 bath,5th floor 1,200 sqft
(probably less, in actuality) condo in a decent-to-good location (this
particular one is on 28th & 6th). The price/sqft is more than 5x
higher for the NYC condo than the St. Louis mansion.
Certainly, there are more $250,000/year jobs in Manhattan than their
are in St. Louis, but I think one would be hard pressed to consider
raising a family in a 1,100 sqft NYC condo (even one with high-end
finishes/appliances) versus raising one in a mansion in St. Louis, it's
hard to consider the former family rich, especially versus the
latter. Sure, many people find the allure and cultural benefits of
living in Manhattan worth the trade-off, but that's another story for
another time. "Rich," no matter how you choose to define it, is a
relative term when you account for cost of and quality of living.
Anyone who says otherwise is likely a pundit and/or politician
pandering to "the poor."
The house in St. Louis is the 10th most expensive home in St. Louis
currently listed in the Missouri MLS. The condo in Manhattan is
roughly the 1,500th most expensive current listing there. Hell,
there's about 500 current listings in Manhattan for over $5 million,
and almost 200 over $10 million, topping out at a stratospheric $60
million! $250,000 in St. Louis and you're among the top 10 in town.
$250,000 in Manhattan and you're just another middle/upper-middle class
guy or gal trying to make it big in the Big City.
Personally - and this concept goes back to when I was but a wee lad
- when I think of someone being rich, not just well-off, but RICH, I
think of at least a new(ish) S-Class Mercedes and a Range Rover in the
garage, if not a Porsche Turbo or Ferrari to drive on weekends up to
the house in Westchester or South Hampton or wherever. I don't
consider a family that can afford to live in a nice 1,100 sqft condo in
an ok neighborhood in Manhattan to be RICH.
They're certainly not poor by any stretch of the imagination - please, so saying would be patently ridiculous
- but they're not entertaining dozens of the City's upper-crust guests
for dinner parties (as one could do with the 6,000 sqft in the St.
Louis mansion) let alone taking the non-existent Bentley out to the
Country Club at which they can't afford a membership.
Heck, depending on how many children they have and how much they
spend on non-essentials, they're still relegated to flying coach. RICH
people don't fly coach - let alone commercial - unless its by their own
volition.
No one should be even remotely considering playing a violin - no
matter how tiny - for someone making $250,000 in Manhattan, but no one
should think, not for a minute, they're living the lifestyles of the
Rich & Famous, either.
They're living better than 99.99% of the rest of the World's
population for crying out loud, but a Nationally-uniform standard of
"RICH" for tax and policy purposes that ignores cost of living unfairly
punishes those who live in high-cost areas far more than it does those
who live in lower-cost ones.
Surely, there's choice involved here, but is it right to punish those who move to the areas where there are more high-paying jobs (or the chance of getting one)?
*Caveat: The information presented above on cost of living is from
the link at the beginning of this article is from ReMax, the real
estate brokerage. The data is cited as being from a CNN Money article
and the U.S. Census but I have not independently verified the accuracy
of these numbers.
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Cost of living in North NJ or Long Island has increased well above inflation in terms of home price, transportation, etc. More bang for your buck than Manhattan for sure but the hour or two (each way) commute sucks, having done it far too many times myself...
Not that much more bang for your buck these days. I have plenty of B&T friends who pay $200-$300+ per month for train tickets, and on top of that (because they live in the burbs or boroughs) have to carry car payments, car insurance, gas, and maintenance costs. Between all of those commuting costs they're spending at least as much as they would to live in the city (albeit in a smaller abode) and NOT have to commute 2+hrs every day.
Seems odd to me that the City that will need them the most has outlawed firearms.
An here in the Midwest with that 5500 sq ft "mansion" would come property taxes of 25k/yr, the need for 2 cars, yard maintanence, upkeep, paint, carpeting, HVAC, snow removal, yada, yada, yada.......How the hell does someone making only 250k/yr afford that kind of house other than living the American drean of betting on the come and incredible appreciation so they can flip that sucker before it takes them down.
Good point. That house I mentioned I believe has taxes of $14,000/year. It's not on a very big plot of land so not alot of snow-removal/landscaping/etc, but hvac costs could be quite high. The taxes on the NYC apartment are somewhere around $10,000/year, and depending on the building systems/use, utilities could be hundreds of $'s/month, even though its 1/5th the size of the St. Louis mansion. I lived in a 500 sqft apartment and our utilities (cable/internet/electricity) came out to $300/month during the summer - and we kept the A/C off during the day!
(Gilda Radner voice) nevermind.
What's all this talk about Eagle Rights?
And people deploring violins on television?!
I'm worried about High School stubbings. Can't they afford shoes in WI.?
An ounce of gold buys you one Square Foot of living space in NYC!
http://www.nysun.com/pics/68830.jpg
Or a quarter acre of farm ground.
We farm a bit differently here in da city!! The sheeple are our cattle!!! <Just Kidding>
No you are not kidding! Farming people has always paid well!
If Wisconson caves in to an 8% pay cut (money teachers will need to contribute to their health care/pensions rather than take home) we are truly an insane society. GOVERNMENTS CAN'T CUT COMPENSATION WHEN IN FISCAL CRISIS????????
The repulican senators are getting death threats over pay cuts to trachers?
Americans are true to the core WIMPS!!!!!!!!!!! and teachers personify this weakness.
There is a pool of the 22% unemployed that CAN REPLACE EVERY WISCONSON TEACHER!!!!!!!!!!!!
Wisconsin has no "fiscal crisis".
The governor wants workers to pay for his new business tax breaks,
and do some union busting for his sponsor, Koch.
http://www.alternet.org/newsandviews/article/479560/12_things_you_need_to_know_about_the_uprising_in_wisconsin
just outsource the teaching jobs to video conference in India or let Watson earn some money on the side
actually i'm kind of on board this theory. the "Pink Floyd--We Don't Need Know (sp?) Education" addendum I think it's called.
Walter Sobchak: Were you listening to The Dude's story?
Donny: I was bowling.
Walter Sobchak: So you have no frame of reference here, Donny. You're like a child who wanders into the middle of a movie and wants to know...
The Dude: (interrupting) Walter, Walter, what's the point, man?
Walter Sobchak: There's no reason - here's my point, dude, there's no fucking reason why these two...
Donny: Yeah, Walter, what's your point?
It really tied the room together.
Thanks for the laugh. Love it.
NO!!!! WTF!!!!!
!!!!!!!!
Hey Bob,
The so-called budget repair bill has a little notice provision.
A pay-off to Walker's corporate masters.
Little wonder he tried to ram it through with virtually no time to read it or comment.
http://www.huffingtonpost.com/2011/02/21/scott-walker-wisconsin-budget-p...
While there has been significant attention devoted to the fact that Walker's 144-page budget repair bill would strip away collective bargaining rights for public employees, a less noticed provision that would allow the state to sell or contract out any state-owned energy asset in no-bid deals with private corporations.
It's unclear what "the best interest of the state" is.
But if this deal goes through, one of the companies that could stand to benefit significantly is Koch Industries. Koch already has several companies in the state, including a coal subsidiary, timber plants and a large network of pipelines.
During the 2010 election cycle, Walker received $43,000 from the Koch Industries PAC, his second-largest contribution. The PAC also gave significantly to the Republican Governors Association, which in turn helped out Walker considerably in his race. Koch also contributed $6,500 to support 16 Republican legislative candidates in the state.
The Koch-funded group Americans for Prosperity has also been standing with Walker throughout his budget battles, busing in Tea Party activists and launching the site, Stand With Walker. After the election, Walker and other Republican governors received guidance from the American Legislative Exchange Council, a group that is also funded by Koch dollars and has pushed anti-union measures.
Yeah, I know who the Koches are. They're the real world version of what Beck thinks Soros is.
Interesting. It's like the fall of the USSR and subsequent private acquisitions of state assets. Not new, but it bears watching to see if the pace picks up. I wonder if there are similar connections in Ohio.
I'm a rental broker in NYC, been at it 10 years. After 911, you could find a 300 sf studio for $1200/month. Same place is now $1800. The subway fare as doubled in the same period, same with cabs. A goddamn hot dog now costs 3 bucks. Fantastic city, but only if you're young, rolling, or both.
No way really? Kudos to you. Most rental brokers in this city can't speak English much less keep up with the content on ZH.
Too incomplete to mean anything.
Summing up the environment to housing...
Living in Manhattan comes with much more than what it is listed, like living in a power nexus. Much bigger chances to meet somebody 'useful' (cronyism, bow ties, connections etc) in Manhattan than in St Louis.
Not much different actually from living at the King's Court in a smaller appartment while owning a castle somewhere in the rear land.
Oooo, power nexus. I haven't met anyone "useful" since the Ice Palace closed on W 57th.
The problem with NYC is that it is filled with people desperately looking for someone "useful."
The "useful" people don't need them.
Useful people need other useful people to clone themselves.
Those graphs and my words also mentioned utilities, food, etc, you must have missed that. Also, the internet has made physical proximity less important than it once was. Sure, meeting up for dinner/drinks after work is still important, but its not as critical as it once was.
Funny. The day frats are dissolved because of the internet making their parties useless, I will take that point.
Important things are not discussed and decided on the Internet. They are discussed and decided somewhere else, physical presence required.
The cultural argument isn't as strong as it once was, either. If it was 1975 and you lived in St. Louis, well, your choice of films to see was pretty limited compared to living in Manhattan. But now, through DVD's that you can buy and netflix, the person in Manhattan might see something six months before you and that's it. I'm not saying there aren't differences but the internet, the explosion to 500 tv channels and other technological steps forward has put a lot more of the world within the grasp of the person living in St. Louis or, frankly, anywhere else that used to only be available to the person in Manhattan. There's still a distinct edge. It's just not what it used to be.
True to a degree. As a former NYer there are a ton of things that my current city, despite its vastly different culture, just cannot match. Its the little things that often go overlooked.
I suppose you're right if you include air quality, rats/pigeons, and gangs in the mix as well.
The cost of travel is also much lower than it used to be. If you want to see a few broadway shows, take a short vacation to NYC once in a while.
Fair point
oh we cant possibly raise taxes on the RICH, it is all tooooo complicated- what with the cost of living being so different everywhere in the nation. So lets do nothing. Lets let the wages of the middle class go down and bust all the unions. And then, lets put another war on the credit card to prop up the corporate state.
We could all be livin' the good life on the Plantation! Instead of giving tax incentives to actually invest in business and hiring, lets have Trump and the Koch brothers live in their gated communities, drive their armor plated limos to their high rise offices surrounded by security while they drive by the trash filled streets past armless beggars, while widows and children starve and our education system is run by the lowest bidder.
Sounds like utopia to me.
gag
Shanno,
W.in T.he F.uture!