Keep high salary when moving to lower cost of living? (real estate, to rent)

[oklahoma456]

Could anyone with personal experience comment on how their salary changed when moving from a high cost of living area like San Fran, LA or NYC to a lower cost of living area, assuming a lateral or minor promotion (i.e. Engineer III to Engineer III/IV)? I have a job offer in LA, and the job interests me but I don't think I want to stay there for more than 5 years due to the distance from family. I was wondering if I would see any lasting salary benefit if I moved there, got the higher salary associated with the high cost of living, then moved back closer to home (Midwest) where the cost of living is less. Do companies try to at least maintain your current salary at your high cost of living location or do they not take it into consideration at all? I'm particularly interested in the aerospace sector. Thanks!

[Finper]

I can't answer your question but I'm a Ca native and lots of my friends etc have moved out of the state and they all say if you move out you will never be able to come back because the cost of living is so high here. I'm curious to see the responses because a lot of companies are moving to other states and I wonder if they keep paying the high wages to their employees relocating

[man4857]

Originally Posted by oklahoma456

Could anyone with personal experience comment on how their salary changed when moving from a high cost of living area like San Fran, LA or NYC to a lower cost of living area, assuming a lateral or minor promotion (i.e. Engineer III to Engineer III/IV)? I have a job offer in LA, and the job interests me but I don't think I want to stay there for more than 5 years due to the distance from family. I was wondering if I would see any lasting salary benefit if I moved there, got the higher salary associated with the high cost of living, then moved back closer to home (Midwest) where the cost of living is less. Do companies try to at least maintain your current salary at your high cost of living location or do they not take it into consideration at all? I'm particularly interested in the aerospace sector. Thanks!

Generally speaking, the salaries offered by any of the cities you've listed don't follow proportionally to the cost of living (COL). You will still be on the short stick.

Example: I'm currently living in LA, used to work as an SW Engineer I in aerospace industry started at 67K, finished at 70K. Total 2 years of experience gained.

With the 2 years of experience, I left and started the master's program and recently received a job offer in Phoenix, AZ also as Systems Engineer I. They offered me 75K plus sign on bonus.

You can see just from doing simple math, the COL difference between Phoenix and LA is pretty big with housing making up the biggest difference (2 - 3x to rent the equivalent/3x - 4x to buy the equivalent roughly). Except the salary difference is only 5K or about 7%. Even if you take away the 2 yrs of experience and my MS degree, from googling around, the average salary I can expect is somewhere between 60-70K.

If you compare the COL difference (not just daily expenses, but differences in taxation too), you're still poorer by accepting a higher salary in LA than in Phoenix. For me, the math is a no brainer, Phoenix will get me farther financially.

[ryanms3030]

Living in Phoenix is a no brainer except for the fact that you'd have to live in Phoenix

[man4857]

Originally Posted by ryanms3030

Living in Phoenix is a no brainer except for the fact that you'd have to live in Phoenix

As everyone says in real estate, it's all about location, location, location.

I will generally agree but up to a certain limit. There are limits to everything, nothing is infinite, including money.

The first thing to recognize (which many people who live here deny cause apparently they can't do math or use their brain?) is that there exists a price to pay for living in SoCal cause of location and that price premium is insanely high. This doesn't include the daily hassel of traffic and overall general crowdedness.

Then the next thing is to ask, how high is too high. I've seen too many people who become housepoor, and literally do nothing except work and pay their mortgage/rent. I don't know about you, but I might as well commit suicide if that was going to be the rest of my life. I've seen this situation happen far too often, with people complaining they don't have money to take their family on vacations, or go out more often (my parents are in this group too). I tell them, do the math, you're throwing it at your house...

[peter_midnight]

Originally Posted by man4857

As everyone says in real estate, it's all about location, location, location.

I will generally agree but up to a certain limit. There are limits to everything, nothing is infinite, including money.

The first thing to recognize (which many people who live here deny cause apparently they can't do math or use their brain?) is that there exists a price to pay for living in SoCal cause of location and that price premium is insanely high. This doesn't include the daily hassel of traffic and overall general crowdedness.

Then the next thing is to ask, how high is too high. I've seen too many people who become housepoor, and literally do nothing except work and pay their mortgage/rent. I don't know about you, but I might as well commit suicide if that was going to be the rest of my life. I've seen this situation happen far too often, with people complaining they don't have money to take their family on vacations, or go out more often (my parents are in this group too). I tell them, do the math, you're throwing it at your house...

Seriously, something I notice is that all of the people I know that are wealthy are mostly non-natives. It seems like they were transferred or recruited to LA and that's how they eventually became well off. Being single, I never felt the need to travel outside of California, but monetarily it would have been very hard to do. Now that I no longer live there, I have money to travel outside of my state. My friends all make more money than me on paper, but their lifestyle other than good weather (which is a real factor) is relatively poor. I don't need roommates, they do.

As I once heard, it's not how much you make, it's how much you keep. Words to live by

[adr3naline]

I have a bit of exposure to what happens in this situation.
I moved Milwaukee > LA and my company (Fortune 1000) saw it as a 10% COL bump.
We have pulled talent out of LA into lower COL areas (Ex: West Lake TX) and kept them at the same salary.
Although it was the same salary, it was seen as a raise due to the offset in housing costs.
This of course had to be explained to each of these employees, but the drastic difference in housing makes it a clear upgrade.
I doubt these employees will see another pay bump for some time as the company primarily moved them to save spend. More of a long term play.

[BRinSM]

I'm in software and considered relocating out of LA, but pretty much everywhere with good paying software jobs is practically as expensive as LA, if not more so (I'm looking at you Seattle, SF, NY, DC, and even Austin). Of those, SF seems to be the only place with noticeably better pay, everywhere else was about the same as here.

[man4857]

Originally Posted by peter_midnight

Seriously, something I notice is that all of the people I know that are wealthy are mostly non-natives. It seems like they were transferred or recruited to LA and that's how they eventually became well off. Being single, I never felt the need to travel outside of California, but monetarily it would have been very hard to do. Now that I no longer live there, I have money to travel outside of my state. My friends all make more money than me on paper, but their lifestyle other than good weather (which is a real factor) is relatively poor. I don't need roommates, they do.

As I once heard, it's not how much you make, it's how much you keep. Words to live by

Precisely why I decided to move also. The lifestyle/quality of life just plain sucks as the trade off for weather and being in SoCal. I feel like living in a third world country by being in SoCal to be honest, no community is really nice, unless it's in OC and if so, rent is way off the charts. Funny enough is my family is still in denial of reality. Heading into a new state, it's just me, myself, and I.

[ryanms3030]

I think everyone who lives here knows they pay a premium for location. But personally if I had to live in Phoenix I'd want to commit suicide. Places with jobs and overall quality of life are generally expensive. I know I guy who is a system engineer who lived in Phoenix. When he lost his job he had to pick up his family, sell his house and move back here because he couldn't find another job that paid enough there. Ive had job offers in places with lower COL and good lifestyle but I knew if that job went away there wasn't enough industry to easily find a comparable job.