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I was not asking about people doing well in Petticoat Junction, an economically depressed small town in the Midwest. I was asking if average people who worked regular jobs could have a higher standard of living in a place like Minneapolis or Omaha or Tulsa than they could in a boom area like Washington DC.
I grew up close to DC. In my case, I am blessed to be doing alright for myself and my family. However, I had to get an engineering degree and a professional degree to afford the cost of living increase in this area. Housing wasn't this expensive even a few decades ago.
Most people who aren't college-educated moved farther out into less expensive suburbs or left this area entirely. Nowadays, most of the working-class people who live near DC are Hispanic immigrants. Tons of people from El Salvador and Guatemala. There are very few white or Asian working-class people living in DC or its inner suburbs.
So, I would think that cities like the ones you mentioned are much better for people with "regular" jobs.
Obviously one caveat to this question is what it means to be better off economically. You can spend every dime you make regardless of how much it is or where you live and not be better off economically. Hell Vince Young earned ~$35 million over 7 years and is broke. The easier question to answer is if you earn the median income for your immediate area (+/-10%) where are you more likely to be able to live out the traditional American middle class lifestyle?
For a family of 3 are you more likely to be living that lifestyle on ~$63k in Tulsa or $93k in greater NYC?
Purely anecdotally, but still relevant to people actually trying to earn a living today being more "working class", not 35+ years ago. Like I mentioned earlier, we could actually support a family of 4 living our current lifestyle (barely), which I would call slightly upper middle class on my wife's income as an office admin with an Associate's degree and we are millennials living in a more suburban college town area (i.e. flyover country). In a city like DC or NYC, she would have been laughed out the door interviewing for her job when people with master's degrees are hourly employees at Starbucks.
I would find it fascinating to get access to mid or large-sized company salary data who have offices all over the country and see what they are paying their middle-class staff in each city for the same job. How much would a company pay it's electrician or auto mechanic or Administrative Assistant at it's Omaha office vs it's Washington DC office? Then do the figure how much it costs to maintain the exact same middle-class lifestyle in each city in relation to the pay.
I would find it fascinating to get access to mid or large-sized company salary data who have offices all over the country and see what they are paying their middle-class staff in each city for the same job. How much would a company pay it's electrician or auto mechanic or Administrative Assistant at it's Omaha office vs it's Washington DC office? Then do the figure how much it costs to maintain the exact same middle-class lifestyle in each city in relation to the pay.
That's honestly a great question and would be amazing data, especially with a company that employs a workforce that falls into those categories. I can tell you I worked in tech and we had one office in they Valley and one at corporate HQs and while the valley paid more, it wasn't a ton more. They did have slightly better benefits, but a lot of that was specific to California law.
Median Household income Los Angeles County- $61,338
Median Property value- $537,900
Current unemployment rate- 4%
Median Household income Kent County/Grand Rapids Michigan- $59,668
Median property value- $163,300
Current unemployment rate- 3%
Grand Rapids is somewhat cherry picked because it tends to score highly on both quality of life ( entertainment, brewpubs, green and recreational spaces) and low cost of living metrics. For the person who was able to buy low in the Southern California housing market, there's obviously more upside in terms of appreciation, but for the family or person just starting out, actually being able to afford the down payment for a modest home in an above average school district that's a 15-20 minute drive to work and 45 minutes to Lake Michigan in the summer makes a good case for opting into parts of mid-sized middle America in good condition like GR or Indianapolis or Des Moines. Provide you can handle Midwestern winters, which are no joke.
According to this website, someone making $35K as an auto mechanic in the San Francisco CA area would only need to make $17,063.00 in Tulsa OK to have the same standard of living. So money wise the auto mechanic in Tulsa does much better.
(The top 10% highly skilled IT worker may make out better in San Francisco because there is so many more job opportunities in the Bay Area for IT than in Tulsa.)
That's honestly a great question and would be amazing data, especially with a company that employs a workforce that falls into those categories. I can tell you I worked in tech and we had one office in they Valley and one at corporate HQs and while the valley paid more, it wasn't a ton more. They did have slightly better benefits, but a lot of that was specific to California law.
How much would a company pay it's electrician or auto mechanic or Administrative Assistant at it's Omaha office vs it's Washington DC office?
Omaha would be better.
I advise against moving to any high COL metro area for a person who doesn’t have the academic or other background/experience to land a high-paying career.
It will be a struggle financially. It is just not worth it.
Median Household income Los Angeles County- $61,338
Median Property value- $537,900
Current unemployment rate- 4%
Median Household income Kent County/Grand Rapids Michigan- $59,668
Median property value- $163,300
Current unemployment rate- 3%
Grand Rapids is somewhat cherry picked because it tends to score highly on both quality of life ( entertainment, brewpubs, green and recreational spaces) and low cost of living metrics. For the person who was able to buy low in the Southern California housing market, there's obviously more upside in terms of appreciation, but for the family or person just starting out, actually being able to afford the down payment for a modest home in an above average school district that's a 15-20 minute drive to work and 45 minutes to Lake Michigan in the summer makes a good case for opting into parts of mid-sized middle America in good condition like GR or Indianapolis or Des Moines. Provide you can handle Midwestern winters, which are no joke.
Yeah IMO the problem with a lot of these comparisons, is they are irrelevant for people my age like you mentioned. People in their 50s and 60s that bought property in LA, NYC, San Fran, etc. 30+ years ago ended up making a killing. They bought property when the cost of living wasn't as dramatically different as it is today. I couldn't move to LA and take my 10-15% raise and afford the same home I could in Grand Rapids or Tulsa.
I guess the real question for home appreciation for millennials like me just starting out is....Will home prices in the huge cities continue to appreciate like they have over the past 20-30 years, or will they not. The assumption here always seems to...yeah homes are more expensive in high COL areas, but they'll also appreciate more, so in a sense you get an insane amount of leverage. I just don't know if that assumption can hold true over the next 20-30 years. Hell in the Bay area software devs are living in vans or with 3-4 roommates to afford a place to stay. How much longer will people be willing to move there and sacrifice lifestyle to be in Silicon Valley? Will it be when they start out making $200k and your average 1.2k sq ft home costs 2 million? 4 million? 5 million? There has to be a breaking point, just as there has to be a breaking point with college tuition costs where people just say "screw it" I'm not doing that.
Yeah IMO the problem with a lot of these comparisons, is they are irrelevant for people my age like you mentioned. People in their 50s and 60s that bought property in LA, NYC, San Fran, etc. 30+ years ago ended up making a killing. They bought property when the cost of living wasn't as dramatically different as it is today. I couldn't move to LA and take my 10-15% raise and afford the same home I could in Grand Rapids or Tulsa.
I guess the real question for home appreciation for millennials like me just starting out is....Will home prices in the huge cities continue to appreciate like they have over the past 20-30 years, or will they not. The assumption here always seems to...yeah homes are more expensive in high COL areas, but they'll also appreciate more, so in a sense you get an insane amount of leverage. I just don't know if that assumption can hold true over the next 20-30 years. Hell in the Bay area software devs are living in vans or with 3-4 roommates to afford a place to stay. How much longer will people be willing to move there and sacrifice lifestyle to be in Silicon Valley? Will it be when they start out making $200k and your average 1.2k sq ft home costs 2 million? 4 million? 5 million? There has to be a breaking point, just as there has to be a breaking point with college tuition costs where people just say "screw it" I'm not doing that.
but by the same token , when we all bought our first homes in the 1970's in long island they were 30-35k ...that was an insane amount considering our rent was 109 dollars ....
well today those homes are paid off , they hover at about 600-650k in value but taxes are 12-18k a year ...so in affordability that paid off mortgage won't even cover the utility bill ...so many can't stay because the expenses have risen so high that having that paid off house added little to affordability ..... the nice thing though is if they move and sell it works out well but pretty much if staying here -meh ......
my whole point is westchester is one of the most expensive places in the country to live ... real estate taxes are some of the highest in the country. but taxes are high because home valuations are high .. home valuations are high because jobs in the area have pay that makes these areas very desirable .
so one really needs to look at the actual ratio in their own chosen field to see which is better .. in this case the high paying jobs out weighs the cost of living in westchester for many people ...
just saying am i better off in flyover country does not mean much without the specific costs and your exact pay and your chances of continuing to earn that level of pay if you lost that particular job .
But only a very exclusive group of people even in the high cost areas can afford the best of the best types of places. Only a relatively small percentage of even NYC salaries are going to be able to afford that.
I used to live in the most affluent city in the state of Indiana. I'm sure it's not quite Scarsdale, but it's a very nice place to live.
It's going to be much more accessible for the average to do well there. $400k will go a long way, and buy you a very nice home on a nice lot in a gold-plated suburb with virtually no crime, top-notch schools, and all the amenities most people would want.
$400k isn't cheap, but it's cheap relative to similar communities on the coasts. It's a doable mortgage for a white collar professional couple with two incomes.
The Indianapolis job market is very healthy and Carmel is becoming a destination job center in its own right. If a job is lost, you can probably find another one and not have to move.
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