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The best cities to get ahead are often the most expensive places to live (2014)
- xlm1717 11y agoIs it a paradox? It makes sense if you think about it. If you are in a city that is very good for moving up, then you will make more money. Then homeowners can sell their houses for more money and property owners can charge higher rent. If you are in a city with little opportunity for moving up, then you won't be able to afford to pay higher prices for housing, so homeowners and property owners will be forced to lower their prices to make a sale or land a tenant.
- MadManE 11y agoI agree with this, but I don't think that it accounts for everything. For example, my experience in Denver is that wages are below national average, but cost of living is much higher. The consensus that gets spouted here is that the opportunity to live near the mountains is great enough to offset whatever monetary discrepancy there is.
- devonkim 11y agoThis sounds very much like where I'm living. Asheville, NC is among the highest costs of living in NC but has among the lowest wages (cost of beer may be low, but I pay about the same for restaurant meals as I did in the DC area). But this is misleading because Asheville has among the richest of all zip codes in NC and even the US as well (Biltmore Forest's median household income in the zip code is $150k+). What also makes the statistics misleading is that a massive percentage of the population is retired which leads to a high percentage of cash-only home purchases which combined with the general lack of concern for value by many well-off retirees (many retirees here have multiple homes either in Florida or New Jersey) inflates housing for those that are still working. The kids that keep flocking here seem to be fine with low wages in exchange for better quality of life than big cities - myself included. But "getting ahead" doesn't really exist here unless you're an incredibly talented restauranteur typically given the general lack of fast-growing industries that support much of a middle class besides healthcare. The culture here really does not respect greed very well unless you're already in the right social cliques that respect greed to some degree. In short, I'd say that this socioeconomic is actually very representative of the problems that the US as a whole faces with generational gaps and opportunity gaps and shows that even if we eliminated race as an issue we'd still be left with surprisingly little difference in economic outcomes for labor (I think Asheville is something like 89%+ caucasian).
- lotharbot 11y agoDenver has traditionally been very close to the national average for cost of living, and also has average wages (much lower on both fronts than, say, San Francisco.) In the last 3 years or so, rents have gone up largely because laborers who can't find work in other cities have been able to find work in or near Denver, driving up demand for housing while simultaneously driving down average wages. This is slowly being alleviated as new housing is being built, but it'll be a few more years before an equilibrium is reached.
- MadManE 11y agoI guess it's all a matter of perspective. I don't think that comparing anywhere to San Francisco yields many meaningful results, though. It's pretty much an outlier no matter how you look at it. I would hazard to say that the legalization of pot has more to do with these troubles than anyone wants to admit to. It draws in people who subscribe to that lifestyle from a huge surrounding area (increasing demand for housing and supply of labor). I'm not sure that equilibrium is really something that is in the cards here, anyway. The job market is just one piece of the puzzle, and the horrific city planning isn't doing anyone any favors. Needless to say I'm aggressively looking for other places to be.
- dragonwriter 11y ago> For example, my experience in Denver is that wages are below national average, but cost of living is much higher. The consensus that gets spouted here is that the opportunity to live near the mountains is great enough to offset whatever monetary discrepancy there is. While I don't know if that's actually true of Denver, its quite plausible that vacation destinations (like Denver's mountains) would drive up local real estate and consumables prices with competition for transient uses, while much of the economic activity associated with the vacationing uses would materialize elsewhere (with people buying nonconsumable supplies), driving up the cost of living more than they provide direct local economic activity.
- Xcelerate 11y agoAs someone who is trying to convince my girlfriend about why living outside the south for at least a few years is necessary to get a good career start, this article is invaluable. I wish it were the case, but the good jobs (particularly technology-related jobs) unfortunately don't happen to be evenly spread over the United States.
- deleted 11y ago[deleted]
- devonkim 11y agoThis applies for jobs outside of technology, but the unfortunate part my household is finding out is that even if you get a name brand institution on your resume, moving to an area with very scarce jobs like most areas in the South outside an international airport means your credentials don't matter perhaps as much as your last name because the tier of jobs you're looking for with a solid middle class job is the .1%er jobs of big cities equivalently.
- Tenhundfeld 11y agoYour exclusion of cities containing international airports seems odd to me. You're excluding most major cities. You're basically saying there aren't many solid middle class jobs in the rural areas of the South. I think it's generally true, outside of the South as well, that urban areas have more middle class jobs. I'm not trying to invalidate whatever experience you and your household are having. I'm just saying there are tons of tech jobs in the South. Many Southern cities are in the top 25 cities/metro areas for software jobs, e.g., Austin, TX; the DC suburbs in VA and MD; Jacksonville, FL; Raleigh, NC. And while they typically don't show up on lists, I know first hand that cities like Mobile, AL; Huntsville, AL; Tampa, FL; Richmond, VA; Nashville, TN; Knoxville, TN and Atlanta, GA have healthy tech sectors as well. I find it mildly ridiculous when people act like you can't find a good programming job outside of West Coast / Chicago / Boston / NYC.
- jdhawk 11y agoAustin has an international airport...
- jonnycowboy 11y agoActually this is the same conclusion usually associated with richer kids being more successful. "The best kids to get ahead are often the richest".
- humbleMouse 11y agoI live in Minneapolis right now and we have tons of jobs and the cheapest housing ever. The graph is true!
- istorical 11y agoCan you tell me any names of companies to look at for applying or websites/resources/organizations where I might find names? I'm interested in checking the city and its opportunities out.
- alvern 11y agoProtolabs, 3M, Honeywell, Medtronic
- humbleMouse 11y agoBestBuy, Allianz, Thompson Reuters, UnitedHealthGroup, Optum, Cargill, 3M, Target, Oracle, Wells Fargo, USBank. Also check out the Nerdery. They are hiring, based in Bloomington. google "minnetonka minnesota companies" for more. All of the big ones are either in minnetonka, hopkins, eden prarie, or downtown minneapolis.
- jtbigwoo 11y agoLots of ad agencies employ programmers--Olson, Periscope, Mirum, etc. There are several business-y software companies like Concur, Lawson Software, Code 42, Dell (their cloud manager software is developed here). (We're hiring software engineers at Concur, by the way.)
- mattgibson 11y agoThis is not a paradox, it's one of the best known axioms of economics: https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent The key driver is that land values rise when earnings rise. You can't move land, so there is set amount of it within commutable distance of these cities. Also, each bit is in a unique location relative to all the other bits, so every bit of land is either better or worse than the others in terms of your earning potential when you live there. Close to the centre = cheaper and quicker commuting, whereas further out means more expensive and slower. Buying or renting a bit of it to live on is always an auction, so the best bits (where you earn most) are won by those who those who feel it's worth paying extra to get them (because they are the ones who earn the extra income by living there). In this way, if wages rise, then the maximum bid that a person can justify paying in order to live in that city rises, and therefore property is more expensive. This is not a free market, BTW. Land is monopoly.
- chimeracoder 11y ago> This is not a paradox, it's one of the best known axioms of economics: https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent I wish more people understood this principle, because so many superficial economic "analyses" I see in the news completely ignore it. By the way, you're giving the example of physical land, but the general form actually applies to property ownership of any form. (That is, the rent on any property will rise to be equal to the surplus that the renter receives from it, after accounting for transaction costs. In the long run, the property owner is always able to claim all of the surplus from the renter.)
- eevilspock 11y agoLandlords grow richer in their sleep, without working, risking, or economizing. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title. -- John Stuart Mill > In the long run, the property owner is always able to claim all of the surplus from the renter. Which to me is what's broken about land and other natural resources as private property. If the spirit and intent of a free market is to reward people for working hard, for innovation, and for solving problems, then this is the opposite. It rewards people for just sitting on their wealth. That a finite sum of money can buy you an infinite source of income is antithetical to free market principles. > This is not a free market, BTW. Land is monopoly. The only mitigating factor is property taxes, which as a stand-in for ground rents that geolibertarians and Georgists argue for. By the way, the latter are the more honest of the libertarians, as most other schools of libertarianism especially the popular form continually consider property taxes theft. I wish more libertarians understood the Matthew Effect as well as they did supply and demand.
- jwmoz 11y agoStop using "Millenials" in titles.
- DIVx0 11y agoMinneapolis/St.Paul MN is right in the sweet spot. Tons of really good jobs out here, plenty of reasonably affordable and interesting housing in the sub/urban areas. Good education system, great music scene. There are some downsides of course, the winters of course and there are some racial social issues (not addressing here to avoid derailing thread). With all that being said I am looking to add some good software devs to my green field project at a very big local player in the medical insurance field.
- mattlutze 11y agoIt's also strangely in that sweet spot of big city that you have to drive everywhere in. It's in the top couple good case studies of mid-20th century American urban planning. I mean, that light rail system is just, man. It's no wonder the Twin Cities are (one of) the most bike friendly cities in the country -- if you're not driving somewhere it's the only other way to reliably get where you're going in reasonable time :)
- rubidium 11y agoExcept, ya know, during the 6 months of winter :)
- alvern 11y agoIt's even more reliable then, compared to public transit. I think we have one of the largest winter commuting populations in the country. The down side is the trails get plowed last, after the roads and highways.
- semafour 11y agoI walk my two mile commute through the winter, instead of biking. With boots and wool, it's rather pleasant.
- humbleMouse 11y agoThe driving everywhere thing is what I can't stand about Minneapolis. Most of the tech jobs are in the burbs, which means driving. I try to mitigate the driving by living uptown walking distance to bars/grocery store... however with what I am paying for rent I may as well move to one of the bigger tech hubs. The only way to reap all of the benefits of Minneapolis is to work/live downtown. However, most of the tech jobs are in the burbs so it's a problem! Furthermore, downtown minneapolis is pretty lame. All the cool events/restaurants and bars are not found downtown.
- calebm 11y agoMy solution to this problem was to find a remote job.
- iamsohungry 11y agoThat's simply not solving the problem. Yes, you get the money, but you're not getting all of the benefits of living in a major hub. You're missing the times you meet a valuable contact on the train, or at a house party, the free or cheap events and seminars, the chances to see someone important in your field and ask them questions directly. And that's not including all the non-business benefits of living in a socioeconomic hub: good places to eat, public art, etc. Certainly it might be worthwhile to trade all that for lower rent, but don't think you're getting the same thing for less money. You aren't.
- trgn 11y agoI do the remote-thing from Louisville, KY. There has never been a moment that I feel like I'm missing out on the non-business benefits. I've gone to more concerts, plays, excellent restaurants, operas here than I've ever gone when I was living in one of the trendy coastal cities. This is directly related to having more disposable income. Networking opportunities are less, certainly. There are plenty seminars, workshops, and what have you to keep up technically, but there are no big name companies or famous practitioners around. Few SW engineering companies, but decent amount of industries requiring developers. There is undoubtedly a trade-off, but I am not wholly convinced that choosing the high cost/high opportunity trade-off is necessarily the best one. Personally, I felt like I drank the kool-aid a little too much when living in Sodosopa.
- deleted 11y ago[deleted]
- nfriedly 11y agoAs someone who's lived in both the Dayton and San Francisco areas, I have to say: SF has a lot more going on and might be my choice if I were still single. But with a family, I'm a lot happier living in the Dayton area now. It helps that my mortgage here it ~1/2 of what rent was in the bay area (and ~1/4 of what I would have paid for a smaller place in SF proper.) Of course, the big differentiator in my case is that with working in software, I can work remote - I've spent more time working for California companies from Ohio than from California.
- steven2012 11y agoThis paradox sounds like what my Canadian friends describe Vancouver BC as. The house prices on the west part of Vancouver are more than $1.5M CAD for a single family home, but the average salary is around $60-70k. There is almost no real industry in Vancouver, except for tourism, and some people that work in HQ for mining companies, etc, so there isn't enough actual high-wage earners to afford paying those preposterous prices. And yet the house prices keep going up. Everyone says it's mainland Chinese coming in a driving up the prices, but that's what they've been saying since the 1980s, so it can't be true.
- herge 11y agoA system like that is very easy to counter. If residents are truly not the ones buying property, they can simply vote for stringent renters protection, and liberal squatting laws. That will quickly dry up the market for foreigners buying property and letting it sit there.
- eru 11y agoLand value taxes would be more useful.
- csomar 11y agoI don't know about Vancouver BC. But I'll give a highlight about my country capital (Tunis) which is a third-world. Home prices in the good places go from $250K to $2M and the infrastructure is not as good as you'd expect. The average salary is from $3k to $5K. Here is the thing: 1. Lack of good places to have a home. This means you have to bid for land. 2. Lack of good places in other cities, which means rich people in other cities moving to bid on these places. 3. Lots of people make money abroad (foreign salaries) and return after 15 years of work to buy land and construct a home. 4. Older people who would not sell or rent land/homes they need (my parents and some relatives) aka as land/homes hoarding. 5. A good portion of these homes are owned/inherited through generations and they are not interested to sell because of the lack of new/better opportunity. There must some similar reasons if the price holds for too long.
- nugget 11y ago
- jrsnyder 11y agoThe "Top 10 Cities for Social Mobility, Ranked by Affordability" graph suggests that the affordability drop is extremely sharp, but as we can see from the "Percent of Homes Millennials Can Afford vs. Social Mobility" graph, Absolute Mobility remains fairly steady for a number of cities beyond the top 10 cities. Cutting off at the top 10 makes the affordability vs mobility tradeoff seem more severe than it is.
- harpagoxenus 11y agoWould you expect the same pattern to be prevalent in other international tech hubs such as Berlin vs. London or Tel Aviv, for example?
- Magi604 11y agoI spent the summer in Provo, UT (45 mins south of Salt Lake) and what I saw impressed me. Lots of development, lots of tech companies, low housing costs, low crime, low density. Also of the few cities in the world that have Google fiber, Provo is one of them. Some drawbacks: only a little public transit infrastructcure, community has high percentage of mormons, strict laws on drinking. Overall though there's a lot to like about it. If I had the money to invest in real estate, I would be looking in that area first, since I suspect that the place will boom within the next decade.
- shostack 11y agoI wonder if a boom would bring a change in some of the issues that many people find less desirable (ie. drinking laws). Part of why the Bay Area sees the demand it does is not just because of jobs, but because of the combination of great weather, great food/drink, lots to due in the area, and a highly liberal bent. Those things would likely outlast any sort of future tech bubble popping (if we are indeed in another one).
- rwhitman 11y agoI would love to see a much more granular look at the data. Particularly another source that maps affordability against social mobility to see if there are smaller communities that sit in the sweet spot but were maybe too influenced by proximity to another market. But maybe just the original data sets. Curious if anyone has some tips on where to find that?
- r-w 11y agoThe third chart should have been a scatter plot, not a sorted line graph—which isn’t actually a thing, since you’re just plotting scatter plot data sorted by one variable and not the other, and connecting the dots for whatever reason.