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> 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

> 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/...
    - coredog64 10y ago
      > 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. I think I've mentioned this before, but when I interviewed at Amazon, the topic of affordable housing came up. I asked the interviewer what was affordable these days, expecting Kent, Auburn, or maybe even Buckley. His answer was Puyallup.
- dgemm 10y ago
  The person you are replying to has direct personal experience with this, and you are telling them they are wrong by citing an internet cost of living calculator.
  - ivraatiems 10y ago
    I'm telling them that cost-of-living is a valuable consideration when deciding on a job offer in a different city. They suggested that it wasn't (or maybe misunderstood what I was saying). I'm not disrespecting their particular experience; it's awesome that their move worked in their favor. But I have interviewed for jobs in cities like SF and I have crunched the numbers on their salaries and so I have direct experience, too. Neither of our stories on their own are proof, they're just anecdotes; cost-of-living calculations are the result of lots of hard data.
    - perspectivep 10y ago
      Say you're making $60k with $40k in expenses. Saving $20k. You move and now make $120k and your expenses double to $80k. You're saving $40k; twice as much. But in reality, not all of your expenses increase that much, and the other benefits (bonuses, matching, raises, interest, etc.) are % based, so the discrepancy increases quickly.
      - tcoppi 10y ago
        Taxes are also percentage based, and progressive at that. Your effective tax rate at $120k is quite a bit higher than at $60k, so you won't be saving double in that scenario because more of it will be going to taxes. Also, the percentage increase of 401k contributions etc. is very easy to calculate out to a dollar value, I recommend everyone do that when comparing salaries(though you have to remember not to consider taxes for those). I find the idea of overall expenses only doubling for a family moving from OK or MI to a place like Seattle somewhat silly. The vast majority of household budget's largest expense by far is housing. If they want to downgrade their standard of living from a 3-4 br 2000+sq feet house, then maybe it will only double. Otherwise it could easily triple or quadruple, as the original article discusses and evidence for is easily found. Salaries are not 3-4x larger in high CoL areas generally. The difference is pretty stark even starting from an area like Metro DC/Baltimore that isn't exactly known for being cheap, but nowhere near SF, Seattle, NYC or Boston levels.
- ryandrake 10y ago
  Cost-of-living is only one cost to consider. I also used to work in Nowhere, USA and now work in the Bay Area. While my "cost of living as a percent of salary" is much higher, so is my "salary minus cost of living" which is a more important measurement. To put it into concrete hypothetical terms: Person A lives in rural Iowa, makes $50K a year after taxes, and their cost of living items (housing, gas, food, etc.) add up to $20K. Person B lives in the city, makes $100K a year after taxes, and their cost of living items add up to $60K. All other things being equal (I know, that's a stretch), who's doing better? One school of thought is that A is better off because while they're making half the salary, their cost of living is 1/3rd. My school of though says that B is better off because he has $10K more to do things that cost the same as they do for person A: Investment, travel, Netflix, anything you buy on Amazon, whatever.
  - tcoppi 10y ago
    If you can take a job somewhere with more than double your after-tax salary(what you would have to do to go from $50k after tax to $100k after tax) and only double your living expenses, of course you will come out ahead. I don't think that is a common situation for a family unless you either downgrade your standard of housing(smaller, add roommates, less desirable area, increase commute, etc) or are seriously underpaid. For single people it might be more commonly possible. Probably explains why a lot of people seem to come to my relatively high CoL area straight out of school and move away as soon as they start a family.
vonmoltke 10y ago
> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. That is not what I see. Food seems to be about 10% - 15% higher than here in Dallas. Sales tax is slightly higher. Gas is definitely higher (about 20%). Travel from SeaTac is more expensive and less flexible than travel from DFW. I spend maybe $5000/year on online purchases and other things that would be the exact same price regardless of geography. Everything, with the probable exception of insurance, is more expensive in the PNW than it is in the Midwest. It certainly is not as big a part of the calculation as housing, but it is not a wash.
- perspectivep 10y ago
  Washington has no state income tax.
  - vonmoltke 10y ago
    Neither does Texas.
dragonwriter 10y ago
> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. Well, perhaps less than double, but still higher overall (except, obviously, stuff on Amazon will probably be the same, as I don't think they've implemented destination-specific pricing.) Gas is definitely higher in California than the national average, and higher in the Bay Area than the statewide average. Vacations will depend on where you want to vacation. Lots of services will be more expensive, because the people selling those services need to make enough money to live in the area. (Similar with goods where locally-sourced labor is a significant factor to the total cost of getting the good to you.)
nsxwolf 10y ago
Since you typically have to wait a year to find out if the promises about raises and bonuses were legitimate, I never factor that into a decision.

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/...
  - coredog64 10y ago
    > 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. I think I've mentioned this before, but when I interviewed at Amazon, the topic of affordable housing came up. I asked the interviewer what was affordable these days, expecting Kent, Auburn, or maybe even Buckley. His answer was Puyallup.
dgemm 10y ago
The person you are replying to has direct personal experience with this, and you are telling them they are wrong by citing an internet cost of living calculator.
- ivraatiems 10y ago
  I'm telling them that cost-of-living is a valuable consideration when deciding on a job offer in a different city. They suggested that it wasn't (or maybe misunderstood what I was saying). I'm not disrespecting their particular experience; it's awesome that their move worked in their favor. But I have interviewed for jobs in cities like SF and I have crunched the numbers on their salaries and so I have direct experience, too. Neither of our stories on their own are proof, they're just anecdotes; cost-of-living calculations are the result of lots of hard data.
  - perspectivep 10y ago
    Say you're making $60k with $40k in expenses. Saving $20k. You move and now make $120k and your expenses double to $80k. You're saving $40k; twice as much. But in reality, not all of your expenses increase that much, and the other benefits (bonuses, matching, raises, interest, etc.) are % based, so the discrepancy increases quickly.
    - tcoppi 10y ago
      Taxes are also percentage based, and progressive at that. Your effective tax rate at $120k is quite a bit higher than at $60k, so you won't be saving double in that scenario because more of it will be going to taxes. Also, the percentage increase of 401k contributions etc. is very easy to calculate out to a dollar value, I recommend everyone do that when comparing salaries(though you have to remember not to consider taxes for those). I find the idea of overall expenses only doubling for a family moving from OK or MI to a place like Seattle somewhat silly. The vast majority of household budget's largest expense by far is housing. If they want to downgrade their standard of living from a 3-4 br 2000+sq feet house, then maybe it will only double. Otherwise it could easily triple or quadruple, as the original article discusses and evidence for is easily found. Salaries are not 3-4x larger in high CoL areas generally. The difference is pretty stark even starting from an area like Metro DC/Baltimore that isn't exactly known for being cheap, but nowhere near SF, Seattle, NYC or Boston levels.
ryandrake 10y ago
Cost-of-living is only one cost to consider. I also used to work in Nowhere, USA and now work in the Bay Area. While my "cost of living as a percent of salary" is much higher, so is my "salary minus cost of living" which is a more important measurement. To put it into concrete hypothetical terms: Person A lives in rural Iowa, makes $50K a year after taxes, and their cost of living items (housing, gas, food, etc.) add up to $20K. Person B lives in the city, makes $100K a year after taxes, and their cost of living items add up to $60K. All other things being equal (I know, that's a stretch), who's doing better? One school of thought is that A is better off because while they're making half the salary, their cost of living is 1/3rd. My school of though says that B is better off because he has $10K more to do things that cost the same as they do for person A: Investment, travel, Netflix, anything you buy on Amazon, whatever.
- tcoppi 10y ago
  If you can take a job somewhere with more than double your after-tax salary(what you would have to do to go from $50k after tax to $100k after tax) and only double your living expenses, of course you will come out ahead. I don't think that is a common situation for a family unless you either downgrade your standard of housing(smaller, add roommates, less desirable area, increase commute, etc) or are seriously underpaid. For single people it might be more commonly possible. Probably explains why a lot of people seem to come to my relatively high CoL area straight out of school and move away as soon as they start a family.

vonmoltke 10y ago

> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. That is not what I see. Food seems to be about 10% - 15% higher than here in Dallas. Sales tax is slightly higher. Gas is definitely higher (about 20%). Travel from SeaTac is more expensive and less flexible than travel from DFW. I spend maybe $5000/year on online purchases and other things that would be the exact same price regardless of geography. Everything, with the probable exception of insurance, is more expensive in the PNW than it is in the Midwest. It certainly is not as big a part of the calculation as housing, but it is not a wash.

perspectivep 10y ago
Washington has no state income tax.
- vonmoltke 10y ago
  Neither does Texas.

dragonwriter 10y ago

> Plus, even if your housing cost doubles, other expenses don't. Food costs, gas, vacations, and everything on Amazon is the same. Well, perhaps less than double, but still higher overall (except, obviously, stuff on Amazon will probably be the same, as I don't think they've implemented destination-specific pricing.) Gas is definitely higher in California than the national average, and higher in the Bay Area than the statewide average. Vacations will depend on where you want to vacation. Lots of services will be more expensive, because the people selling those services need to make enough money to live in the area. (Similar with goods where locally-sourced labor is a significant factor to the total cost of getting the good to you.)

nsxwolf 10y ago

Since you typically have to wait a year to find out if the promises about raises and bonuses were legitimate, I never factor that into a decision.