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Or if there were more high wage earners in the region. Philadelphia doesn't have a high-powered job market. And there's not enough outside investment to put much upward pressure on housing prices.
Quote:
Originally Posted by kidphilly
its not that there is not high wage earners. This is all (a lot) about growth and new high paying jobs Both Chicago and Philly have lagged other larger metros/cities in attracting and generating such new jobs that lead to more people in higher incomes search for stock and driving up process Both just sort of churn along without the high price increases driven by demand driven by new job growth
I agree with both of you. More higher paying jobs, more high wage earners (but move these jobs into CC or UC), and speed it up and you get a more expensive city. Time is a variable often overlooked. Speed job growth and gentrification up and you get frenzied growth that drives prices up even higher.
Or if there were more high wage earners in the region. Philadelphia doesn't have a high-powered job market. And there's not enough outside investment to put much upward pressure on housing prices.
Philadelphia's job market, particularly on a regional level, is much more high-powered than you imply. Otherwise over 17% of all metro-wide earners wouldn't be making 6-figures (as I noted in an earlier post, jobs are sought region-wide; it's not as though a local job market stops at municipal borders). That puts it among the top tier of all metro areas.
Aside from that, here is a comparison of income needed in expensive metros mentioned to Philadelphia's 2015 median earnings for workers aged 25+ ($42,475), and then they're actual median earnings (rounded to 45K (+$2,525) for sake of valid comparison).
Metro area | $ Needed to match $45K in metro Philadelphia | Actual Median Metro Earnings (with marginal increase of $2,525 included)
New York (Brooklyn) | $65,242 | $46,635
San Francisco | $65,732 | $53,611
Boston | $53,654 | $52,475
Seattle | $51,998 | $49,875
Los Angeles | $52,337 | $38,639
Philadelphia's job market, particularly on a regional level, is much more high-powered than you imply. Otherwise over 17% of all metro-wide earners wouldn't be making 6-figures (as I noted in an earlier post, jobs are sought region-wide; it's not as though a local job market stops at municipal borders). That puts it among the top tier of all metro areas.
But in terms of why a place is more affordable than others, I do think that a concentration of jobs and a shortage of housing near those jobs needs to occur. If jobs are located in Center City, University City, King of Prussia, over the river near Cherry Hill (and a number of other places), and there is plenty of land area to purchase housing, I believe you will not create the housing crisis that is abundant in SF/Boston/NYC/DC.
And while numbers are not as shabby for Philly as many think, we do not have the job market that NYC, SF or DC have.
Aside from that, here is a comparison of income needed in expensive metros mentioned to Philadelphia's 2015 median earnings for workers aged 25+ ($42,475), and then they're actual median earnings (rounded to 45K (+$2,525) for sake of valid comparison).
Once adjusted, they all actually fall below the Philly area's median income, with Boston coming the closest.
This has nothing to do with why costs are so high in the first place. What you're arguing here is something entirely different.
Rents and housing prices in the DC area aren't high by some act of magic. They are high because the people there, comparatively speaking, make a lot of money. Yes, the cost of living is higher in DC and other cities, but that's in part a function of higher wages.
But in terms of why a place is more affordable than others, I do think that a concentration of jobs and a shortage of housing near those jobs needs to occur. If jobs are located in Center City, University City, King of Prussia, over the river near Cherry Hill (and a number of other places), and there is plenty of land area to purchase housing, I believe you will not create the housing crisis that is abundant in SF/Boston/NYC/DC.
Completely agree. Philly's was unquestionably not just snubbed, by honestly robbed, of many of its high-paying jobs over many years. Sign are positive for a reversal of this trend, but of course, it doesn't have the same urban concentration of high-paying jobs as other markets.
Quote:
Originally Posted by AJNEOA
And while numbers are not as shabby for Philly as many think, we do not have the job market that NYC, SF or DC have.
I think what we're getting at, though, is the very top tier of the entire US job market. The data are very clear that standard, middle-class earners in the most expensive cities have, at best, the same earning power as Philadelphians.
It's only the top 5 or 10% in these cities, essentially the relatively large pool of folks who helm very large corporations with incomes that would be almost without peer in Philly, essentially the creme de la creme of earners in the US (but are still far from the norm in cities like SF and NYC). Aside from completely shifting executive operations to a city like Philly, it's extremely challenging for any city to produce jobs like that.
Completely agree. Philly's was unquestionably not just snubbed, by honestly robbed, of many of its high-paying jobs over many years. Sign are positive for a reversal of this trend, but of course, it doesn't have the same urban concentration of high-paying jobs as other markets.
Does it really matter that much where the jobs are concentrated? NOLA101 and I made the point earlier that these cities tend to be very expensive well beyond their municipal boundaries.
The discussion here is not supposed to be about Chicago and Philadelphia's economic standing relative to the rest of America. It's supposed to be about why Chicago and Philly are cheaper than other prominent US cities like SF, Boston, DC, etc. Wages is a big part of the answer.
This has nothing to do with why costs are so high in the first place. What you're arguing here is something entirely different.
Rents and housing prices in the DC area aren't high by some act of magic. They are high because the people there, comparatively speaking, make a lot of money. Yes, the cost of living is higher in DC and other cities, but that's in part a function of higher wages.
I think my major point, which I tried to finesse in my last post, is that standard earners have less relative wealth in the most expensive cities, but the highest earners have greater relative wealth in cities like SF, NYC, and Boston because of a significantly greater concentration of executive-level earners.
The highly wealthy and influential class of folks is not nearly as prominent in a city like Philly, but nevertheless, they're still exceptional compared to the average New Yorker, San Franciscan and Bostonian.
I think my major point, which I tried to finesse in my last post, is that standard earners have less relative wealth in the most expensive cities, but the highest earners have greater relative wealth in cities like SF, NYC, and Boston because of a significantly greater concentration of executive-level earners.
The highly wealthy and influential class of folks is not nearly as prominent in a city like Philly, but nevertheless, they're still exceptional compared to the average New Yorker, San Franciscan and Bostonian.
But this is tangential to the OP, no? He asked why Chicago and Philadelphia are more affordable than a few other select U.S. cities. The question is not whether someone earning X in NYC is worse off or better off than someone earning Y in Philadelphia.
Why do you think the DC region is more expensive than the Philadelphia region?
But this is tangential to the OP, no? He asked why Chicago and Philadelphia are more affordable than a few other select U.S. cities. The question is not whether someone earning X in NYC is worse off or better off than someone earning Y in Philadelphia.
Why do you think the DC region is more expensive than the Philadelphia region?
I've been told before on C-D that the only reason certain cities have high salaries is because the COL is so high. That seems backwards to me.
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