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For the "superstar" cities like SF and NYC, you probably need to be in the top 20%, maybe top 10% or so, of certain fields like tech or high finance to make it work. That very top of the talent pool can do incredible things from the opportunities in the superstar cities that just aren't available anywhere else. $400,000 for a partner at a big law firm or something is not going to be available everywhere.
If you're in an "average" job, the housing costs will probably eat up far more than you'd gain in terms of salary.
The sweet spot are mid-major markets with a reasonable cost of living and high availability of local jobs. Small towns and rural areas often pay less, even adjusted to local COL, than mid-majors, and have scant job availability.
I agree on the depends. I still remember in 2014, best offer in Chicago was $55k, offer in NYC was $80k. My situation has always been goofy though.
For Chicago, I'd need a car even though the city has probably the second best mass transit in the US. which I had. or pay much more in rent than I was. The Chicago area was, probably not anymore, a medium cost of living area. The expenses basically came out to be about $1000-1500 in rent were I to get a place in a good area, $700sh to rent in a decent area in the city, or $500/mo roughly to handle my fathers house which was: falling apart, had no insulation, had pipes break when it was really cold (-30F), etc. It was much cheaper on other metrics to have existed in IL at the time, with a parking garage on State and Congress (I think, it was somewhere on State St) costing $2/day (It's now $20-40/day(!)). However, the other costs of the car increased my COL by 1.5x, and my QOL would have been crap by my metrics. Probably would still just be going to work, playing video games, sleep.
For NYC, obviously it was a no brainer to get rid of the car, which also meant getting rid of the gas expense, maintenance, insurance, license stickers, and the worst part: future expense of buying a car when the one I had broke down. I have good connections in NYC too, or maybe the people are better (YMMV) as I was able to swap with my friend in a shared apartment for $600/mo. The other particular things, like groceries costing less and untaxed, clothes untaxed, etc were icing on the cake.
Obviously now I'm paying more, but NYC offers ways to not pay what is market rate and I've taken advantage of such. My comparison Chicago, prices have ballooned a bit. I wouldn't be surprised if it becomes an HCOL area soon if it's not already. However, the payscale didn't seem to have risen much...
I've tried to price LCOL places, but then I have friends with more experience than me making half of what I make at an older age. Even after expenses, I have more money than their gross. I most certainly think that HCOL places have their worth, but it all depends. I personally like apartment living over houses and hate driving, so the lifestyle is much better. I can also deal with the negatives of my specific area a lot better than I could where I'm from. It's been over 9 years and I'm still very comfortable with my decision.
In a nutshell, it's very high YMMV. Maybe people just need to make a jump and experience the differences. The realities might surprise some.
For the "superstar" cities like SF and NYC, you probably need to be in the top 20%, maybe top 10% or so, of certain fields like tech or high finance to make it work. That very top of the talent pool can do incredible things from the opportunities in the superstar cities that just aren't available anywhere else. $400,000 for a partner at a big law firm or something is not going to be available everywhere.
If you're in an "average" job, the housing costs will probably eat up far more than you'd gain in terms of salary.
The sweet spot are mid-major markets with a reasonable cost of living and high availability of local jobs. Small towns and rural areas often pay less, even adjusted to local COL, than mid-majors, and have scant job availability.
I agree, but if you’re top 10-20% in your field those mid-major markets pay great too. Sure You might be able to make $300k in the Bay as a Data Scientist, but what about the guy in Kansas City making $200k/yr s a Data Scientist? Who is actually better off?
I agree, but if you’re top 10-20% in your field those mid-major markets pay great too. Sure You might be able to make $300k in the Bay as a Data Scientist, but what about the guy in Kansas City making $200k/yr s a Data Scientist? Who is actually better off?
The guy in the Bay because he doesn’t have to live in Kansas City! Joking aside, perceived desirability as to where one wants to work (and play) is a big factor in the HCOL equation.
I agree, but if you’re top 10-20% in your field those mid-major markets pay great too. Sure You might be able to make $300k in the Bay as a Data Scientist, but what about the guy in Kansas City making $200k/yr s a Data Scientist? Who is actually better off?
The guy in the bay area. He knows he can easily get a dozen offers from quality tech companies if things don't work out or he decides to try something different. There might be ONE job in KC that pays 200K for every hundred in the bay. Also if the guy in the bay area ever wants to go off on his own it will be way easier to pitch his start up idea to capital if he's already well known in as a player in the area.
The guy in the bay area. He knows he can easily get a dozen offers from quality tech companies if things don't work out or he decides to try something different. There might be ONE job in KC that pays 200K for every hundred in the bay. Also if the guy in the bay area ever wants to go off on his own it will be way easier to pitch his start up idea to capital if he's already well known in as a player in the area.
This is my experience in working for a company with offices in a few different states ....when A guy in our Ohio office loses a job it can be a disaster for him ....when a guy in our headquarters in ny loses a job , competitors may be tripping over each other to get him
The guy in the bay area. He knows he can easily get a dozen offers from quality tech companies if things don't work out or he decides to try something different. There might be ONE job in KC that pays 200K for every hundred in the bay. Also if the guy in the bay area ever wants to go off on his own it will be way easier to pitch his start up idea to capital if he's already well known in as a player in the area.
I don’t think anyone is considering things such as career opportunity/visibility or desirability - or even one’s social life. There’s a reason why the HCOL exists in places such as SF and NYC - and to pull in the best talent, most companies are willing to offer more than a ‘standard’ COL difference in pay anyway. Of course, the better talent - the better the opportunity (and the more visible he or she wants to be).
I don’t think anyone is considering things such as career opportunity/visibility or desirability - or even one’s social life. There’s a reason why the HCOL exists in places such as SF and NYC - and to pull in the best talent, most companies are willing to offer more than a ‘standard’ COL difference in pay anyway. Of course, the better talent - the better the opportunity (and the more visible he or she wants to be).
But even at that you still have the "highly paid so and so" in Mountain View that can is living in a shoe box studio or a two bedroom with a roommate, because housing costs are so high, versus a run of the mill "average pay so and so" with their three bedroom house in Smithville USA.
But even at that you still have the "highly paid so and so" in Mountain View that can is living in a shoe box studio or a two bedroom with a roommate, because housing costs are so high, versus a run of the mill "average pay so and so" with their three bedroom house in Smithville USA.
A high-paying ‘so and so’ in Mountain View would likely be able to rent an apartment on his own (or your idea of high pay is different than mine) and also may not care about a three bedroom house anywhere else. Not everyone would make the same choice; but the higher the level of talent (in tech or any professional business environment), the more likely the company will attempt to make it worth your while (through relocation packages, bonuses, perks, etc).
If one is making the decision to move on their own, however, it can be a completely different landscape - and then the need to compare one’s pay (and circumstances) to the COL by itself is, of course, absolutely necessary and contingent upon what someone does for a living as well. In the latter situation, there is a high probability the COL pay differential would not be worth the move (or the difference it would make in the person’s standard of living) - but it’s not meant to. It’s simply a way to attempt to make it ‘even’ and more livable.
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Joking aside, perceived desirability as to where one wants to work (and play) is a big factor in the HCOL equation.
