7 ms·

Good on the author for making the decision based on his and his family's needs and not "but it's a top-tier company, man, you gotta work for the best be the bes

Good on the author for making the decision based on his and his family's needs and not "but it's a top-tier company, man, you gotta work for the best be the best do the BEST." People often don't consider cost-of-living when making job decisions. I think the way to do it is to equalize the salaries based on cost-of-living across each company you're considering. So if you make $60,000 in a small midwestern town, that's the same as making $120k in Seattle or the Bay Area. If you make $80,000 in a small midwestern town, you're coming out ahead of the guy/gal pulling six figures in SF. It's an important consideration and one I think many employers try to get you to ignore.

cloudjacker 10y ago
Genuinely curious, do people really not consider these things? I've noticed it is continually easy to wow people with dollar numbers, but I don't know what their thought process is.
- ivraatiems 10y ago
  I know I didn't until it was pointed out to me that I should. It's one of those things where it's totally logical but also not something somebody who's never moved from city to city (like me, until that point) would realize.
perspectivep 10y ago
> So if you make $60,000 in a small midwestern town, that's the same as making $120k in Seattle or the Bay Area. Not true at all. I made almost that exact jump when moving from the Midwest to Seattle. You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Sign-on bonuses and stock benefits are common out here but rare in the Midwest. Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too. Not to mention you can probably keep most of your salary if you decide to move back to the Midwest.
- ivraatiems 10y ago
  > Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too. That's actually not true. I'm referring to cost-of-living, which includes housing, gas, food, etc. All the things you list. Here's a calculator you can use to try it for yourself [1]. Using that, if I live in Columbia, MO (which I chose at random) and make $60k, I must make $111k in the Bay Area to maintain the same standard of living. [1] http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx http://www.bankrate.com/calculators/savings/moving-cost-of-l... > You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Not to mention sign-on bonuses and stock benefits, which are rare in the Midwest. That is definitely correct. But you can certainly find companies offering good (signing and regular) bonuses and 401k matching; I did. Stock is much rarer, as you say.
  - perspectivep 10y ago
    The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I moved.
    - cookiecaper 10y ago
      It really depends on the individual situation. The biggest cost variance is in housing. In the Midwest, you can get a 2,500 sq ft home for ~1.3k +/- $350. [0] Under normal leasing standards (no more than 1/3rd your income to rent), you can pay that if you have a job in the $50k-$60k range. And that's almost the standard -- big houses and big yards for everyone. In LA or SEA, you're looking at 2.5x-4x that, which is at least $3500/mo. [1] Under normal leasing income standards, you'd have to have a salary of $140k+ to barely meet the minimum requirements, and that's for a "cheap" rental home. The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. (In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) If you're a single person or just have a partner, you can probably take a hit and go from a $800/mo 2-bedroom apartment @ $55k to a downsized $1600/mo apartment @ $110k and still make a lot more money than you did in the place with a lower CoL (even after calculating a 30-50% increase in the cost of some goods, like utilities, gas, and food). However, if you have kids, this quickly becomes impractical, because it's way harder to jump from a $1300/mo home @ 60k to a $3500/mo home @ 115k. For extra credit calculate the change to net pay based on differing tax laws. This is especially large if you're coming to CA, which has the highest state income tax in the nation at 13.3%. Most Midwestern states have tax rates between 4 and 7 percent. Some of the most populous "flyover" states (Texas and Florida) have a 0% tax rate (and to Amazon's credit, WA does too). [2] [0] http://archive.is/OKMTb http://archive.is/OKMTb [1] http://archive.is/8R5aI http://archive.is/8R5aI [2] http://taxfoundation.org/sites/taxfoundation.org/files/docs/PIT-01.png http://taxfoundation.org/sites/taxfoundation.org/files/docs/...
ehotinger 10y ago
$120k in Seattle is not equivalent to $120k in the Bay Area...
- freyir 10y ago
  No yet, but the cost of living in the Bay Area has leveled off somewhat (or even dipped slightly), while it continues to rise in Seattle.
travisby 10y ago
One additional consideration to that - if you're working at a company with a 401k match, 4% of $120k is a lot more in the bank than 4% of $60k. Working (and living) in an expensive area will still make more financial sense than working in a less expensive area - from a retirement standpoint (that's if you move somewhere else in the end for retirement. If you stay where you are it won't balance out)
0xEFF 10y ago
> If you make $80,000 in a small midwestern town, you're coming out ahead of the guy/gal pulling six figures in SF. Home prices have risen much more quickly out West than they have in the Midwest. If you're in a position to buy a home, I recommend factoring this into the equation and plan as well. It can be a great financial investment to move out west for at least two years, then back to the Midwest after selling or renting the home for some time.
gnu8 10y ago
There isn't even a difference between $60k and $120k, from the employer's frame of reference. That's not even real money. The tens of millions are going to the top managers, VCs, and shareholders, who leave the people that actually generate that profit to argue over scraps. Everyone should be arguing for a lot more money, regardless of geography.
hibikir 10y ago
The difference in practice is nowhere near that though: I made those 60K when I graduated, in 2000! Salaries in the midwest for experienced engineers are far better than 80K: A few years ago, I made 120K as a full time employee in St Louis. A darned good house is 200K. Consulting gigs pay more: Last year I billed 220K, just a single customer. In comparison, I know senior engineers in the bay area making 150K at companies you'd recognize, with stock packages that don't mean squat without liquidity events. And a SF house equivalent to the 200K St Louis house is 2M. They aren't getting a good deal. It seems to me that the problem with your argument here is not that you aren't right, but that you are providing numbers so far away from reality that people can pick them apart and claim that the midwest is a bad deal. A 60K salary upgrade would make San Francisco appealing. But in practice, the range is far smaller, and that's without taking into account companies that hire remote.
- wargame 10y ago
  Hi, I'm also from St. Louis, any chance I could bounce some questions off you in regards to consulting? My email is in the profile, thanks!
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balls187 10y ago
> People often don't consider cost-of-living when making job decisions. Do you have a source for this? Anecdotally, cost of living/quality of life are two big issues with every candidate I've every talked with.
serge2k 10y ago
> People often don't consider cost-of-living when making job decisions. They do. People not living in the cities constantly bring this up. We know. We are not idiots because we live in a bigger city. I have roughly 55k left over after taxes, rent, and 401k. In other words, I'm doing fine even with the higher costs. This is not counting bonus and stock.

cloudjacker 10y ago

Genuinely curious, do people really not consider these things? I've noticed it is continually easy to wow people with dollar numbers, but I don't know what their thought process is.

ivraatiems 10y ago
I know I didn't until it was pointed out to me that I should. It's one of those things where it's totally logical but also not something somebody who's never moved from city to city (like me, until that point) would realize.

perspectivep 10y ago

> So if you make $60,000 in a small midwestern town, that's the same as making $120k in Seattle or the Bay Area. Not true at all. I made almost that exact jump when moving from the Midwest to Seattle. You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Sign-on bonuses and stock benefits are common out here but rare in the Midwest. Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too. Not to mention you can probably keep most of your salary if you decide to move back to the Midwest.

ivraatiems 10y ago
> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. I actually spend a lot less on transportation because I can take public transit instead of a car. We were able to sell one of our cars too. That's actually not true. I'm referring to cost-of-living, which includes housing, gas, food, etc. All the things you list. Here's a calculator you can use to try it for yourself [1]. Using that, if I live in Columbia, MO (which I chose at random) and make $60k, I must make $111k in the Bay Area to maintain the same standard of living. [1] http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx http://www.bankrate.com/calculators/savings/moving-cost-of-l... > You're forgetting things like raises, bonuses, and 401(k) matching that are a % of your salary. Not to mention sign-on bonuses and stock benefits, which are rare in the Midwest. That is definitely correct. But you can certainly find companies offering good (signing and regular) bonuses and 401k matching; I did. Stock is much rarer, as you say.
- perspectivep 10y ago
  The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I moved.
  - cookiecaper 10y ago
    It really depends on the individual situation. The biggest cost variance is in housing. In the Midwest, you can get a 2,500 sq ft home for ~1.3k +/- $350. [0] Under normal leasing standards (no more than 1/3rd your income to rent), you can pay that if you have a job in the $50k-$60k range. And that's almost the standard -- big houses and big yards for everyone. In LA or SEA, you're looking at 2.5x-4x that, which is at least $3500/mo. [1] Under normal leasing income standards, you'd have to have a salary of $140k+ to barely meet the minimum requirements, and that's for a "cheap" rental home. The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. (In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) If you're a single person or just have a partner, you can probably take a hit and go from a $800/mo 2-bedroom apartment @ $55k to a downsized $1600/mo apartment @ $110k and still make a lot more money than you did in the place with a lower CoL (even after calculating a 30-50% increase in the cost of some goods, like utilities, gas, and food). However, if you have kids, this quickly becomes impractical, because it's way harder to jump from a $1300/mo home @ 60k to a $3500/mo home @ 115k. For extra credit calculate the change to net pay based on differing tax laws. This is especially large if you're coming to CA, which has the highest state income tax in the nation at 13.3%. Most Midwestern states have tax rates between 4 and 7 percent. Some of the most populous "flyover" states (Texas and Florida) have a 0% tax rate (and to Amazon's credit, WA does too). [2] [0] http://archive.is/OKMTb http://archive.is/OKMTb [1] http://archive.is/8R5aI http://archive.is/8R5aI [2] http://taxfoundation.org/sites/taxfoundation.org/files/docs/PIT-01.png http://taxfoundation.org/sites/taxfoundation.org/files/docs/...

ehotinger 10y ago

$120k in Seattle is not equivalent to $120k in the Bay Area...

freyir 10y ago
No yet, but the cost of living in the Bay Area has leveled off somewhat (or even dipped slightly), while it continues to rise in Seattle.

travisby 10y ago

One additional consideration to that - if you're working at a company with a 401k match, 4% of $120k is a lot more in the bank than 4% of $60k. Working (and living) in an expensive area will still make more financial sense than working in a less expensive area - from a retirement standpoint (that's if you move somewhere else in the end for retirement. If you stay where you are it won't balance out)

0xEFF 10y ago

> If you make $80,000 in a small midwestern town, you're coming out ahead of the guy/gal pulling six figures in SF. Home prices have risen much more quickly out West than they have in the Midwest. If you're in a position to buy a home, I recommend factoring this into the equation and plan as well. It can be a great financial investment to move out west for at least two years, then back to the Midwest after selling or renting the home for some time.

gnu8 10y ago

There isn't even a difference between $60k and $120k, from the employer's frame of reference. That's not even real money. The tens of millions are going to the top managers, VCs, and shareholders, who leave the people that actually generate that profit to argue over scraps. Everyone should be arguing for a lot more money, regardless of geography.

hibikir 10y ago

The difference in practice is nowhere near that though: I made those 60K when I graduated, in 2000! Salaries in the midwest for experienced engineers are far better than 80K: A few years ago, I made 120K as a full time employee in St Louis. A darned good house is 200K. Consulting gigs pay more: Last year I billed 220K, just a single customer. In comparison, I know senior engineers in the bay area making 150K at companies you'd recognize, with stock packages that don't mean squat without liquidity events. And a SF house equivalent to the 200K St Louis house is 2M. They aren't getting a good deal. It seems to me that the problem with your argument here is not that you aren't right, but that you are providing numbers so far away from reality that people can pick them apart and claim that the midwest is a bad deal. A 60K salary upgrade would make San Francisco appealing. But in practice, the range is far smaller, and that's without taking into account companies that hire remote.

wargame 10y ago
Hi, I'm also from St. Louis, any chance I could bounce some questions off you in regards to consulting? My email is in the profile, thanks!
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balls187 10y ago

> People often don't consider cost-of-living when making job decisions. Do you have a source for this? Anecdotally, cost of living/quality of life are two big issues with every candidate I've every talked with.

serge2k 10y ago

> People often don't consider cost-of-living when making job decisions. They do. People not living in the cities constantly bring this up. We know. We are not idiots because we live in a bigger city. I have roughly 55k left over after taxes, rent, and 401k. In other words, I'm doing fine even with the higher costs. This is not counting bonus and stock.