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My first thought was "why doesn't the cleaning lady move?" And that lead to a thought experiment: what if everyone moved to Nebraska for a more comfortable lif
by DougN7 10y ago
My first thought was "why doesn't the cleaning lady move?" And that lead to a thought experiment: what if everyone moved to Nebraska for a more comfortable life. Prices would go up. The people would experience a Nebraska winter and be willing to have less 'real' money and move back to California. And that's right where we are in the real world. You can't balance just part of life (taxes) when there are other imbalances (benefits of place) that can't be balanced. If costs/life style were comparable in cost between CA and NE, there would be a massive influx into CA. Economics is awesome - it explains so much!
- pmiller2 10y agoThe other side to that is the cleaning lady barely makes enough to survive in SF, much less fund a cross-country move.
- duaneb 10y ago...much less start a business on the other side.
- thesimpsons1022 10y ago...much less abandon her family and friends
- netghost 10y agoIf you're curious, "Nickel and Dimed" is a great book that explores some of this.
- henrikschroder 10y agoBecause she can make $70k as a cleaning lady by living in a city where a lot of households make $500k+ and can afford to pay more than the average for cleaning services. I suspect cleaning ladies in Nebraska don't make $70k...
- dkersten 10y agoBut isn't that the whole point of this discussion? That the money made in Nebraska, while less in absolute terms, still buys more due to lower cost of living and/or taxes?
- seanmcdirmid 10y agoIf your only higher costs are housing and maybe a bit more expensive food, you'll still come out way ahead since everything else stays the same in price. You might have to live in a closest, but you'll have way more money for retirement, or to send back home (as cleaning ladies are often immigrants).
- spraak 10y ago> as cleaning ladies are often immigrants Do you have receipts for this claim?
- seanmcdirmid 10y agoYou mean citations? When I worked in the states, many of the cleaning staff were immigrants. It's not a bad job for them, the pay is good (relatively speaking, vs. training needed), it doesn't require much language skills. Of course, it really depends where you are, but we were talking about SF, I think.
- koolba 10y ago> Because she can make $70k as a cleaning lady by living in a city where a lot of households make $500k+ and can afford to pay more than the average for cleaning services. I suspect cleaning ladies in Nebraska don't make $70k... I suspect the vast majority of cleaning ladies in SF don't make $70k either.
- kristopolous 10y agoThat's an example of rational choice theory btw.
- morgante 10y agoThe benefits of California are vastly overstated. Almost nothing about the climate (I like winter) or culture appeals to me, yet I'm pulled towards there to succeed in a tech career. This is simply network effects in action, except that unfortunately this network has been built in one of the locales in the US with some of the most aggressively anti-growth policies possible. Things would be much better if tech was centered around somewhere like Chicago or even New York.
- chaostheory 10y agoThere are other large metros that support a lot of tech companies outside of California.
- jonlarson 10y agoBut few of them have such a high concentration of true tech companies where the tech is the product and not a cost center.
- chaostheory 10y agoThere are at least 2-3 other metros that meet this criteria and the cost of living is cheaper than the SF Bay Area (or LA)
- muzz 10y agoAre you referring to Seattle and NYC? They are cheaper but not by much.
- chaostheory 10y agoThere's also Austin. Portland is up and coming.
- jasonkester 10y agoThought experiment: Would developer salaries in general be as high as they are today if we hadn't happened to choose an area with such high cost of living area as our nexus, with the consequential requirement to pay so much to attract talent? That is, would a guy like me (or you) be able to pull in multi-six-figures a year to telecommute to the Bay Area from out in the sticks if there weren't so many poor souls physically there keeping rates up for the rest of us? What would things look like if the tech hub were in Ft. Worth TX instead (or Scott's Bluff, Nebraska), with hundreds of miles of flat empty cheap land in all directions to keep housing prices down near zero.
- murbard2 10y agoIncome can also be chosen to a large extent. You can work more, work less, do a harder job, do an easier job. Basing taxes on income suffers from the problem you describe. A flat annual fee, as suggested by Proudhon, would be much more fair. I do not mean a "flat tax", which actually scales linearly with income, but a flat dollar amount. The federal government could replace all of its taxes, all of them (income, corporate, capital gain, etc) with a simple $500 a month per person payment. This would also make a lot of people reconsider their voting priorities. Let's see how likely they'd be to support trillion dollar wars.
- conanbatt 10y agoSubscription Taxes! Interesting idea and had never heard something like that.
- dredmorbius 10y ago???
- jfoutz 10y agomaybe i dropped a zero or something, but i think you're needing about double that to cover the $4T. $4T/350M workers /12 months =~ $1000, per person. if you just count 160M workers, it's more like $2000
- evjim 10y ago$500 per month sounds like the ultimate wage slavery. I prefer being exceptionally underemployed. Reducing almost all my expenses. Forced income tax seems immoral.
- mobilefriendly 10y agoActually the cleaning lady is comparing California with Central America-- international immigration is why CA's population continues to grow. U.S. citizens have been fleeing California by the millions for the last two decades. https://www.manhattan-institute.org/html/great-california-exodus-closer-look-5853.html https://www.manhattan-institute.org/html/great-california-ex...
- dalore 10y agoIn America your job is tied to your medical benefits. Lots of people would like to just move but can't because their job provides medical insurance. And they might have a preexisting condition preventing them from getting medical insurance elsewhere easily. So this economics that balances out the part of life you mention, is reduced since people are less mobile due to medical insurance. If medical insurance was provided by the state (like in most other countries), you would see more people moving where it would be more efficient for them (and the economy) to work.
- matthewmacleod 10y agoI'm not so familiar with the US healthcare system, but I was under the impression that the ACA meant that pre-existing conditions were much less of an issue? In any case, I'm not sure the conclusion follows. We see exactly the same pattern in the UK, where healthcare is almost entirely public. What the calculation fails to take into account, IMO, are other factors – someone who has lived in a location for a long time may be skeptical of moving, simply because they have roots (homes, friends, family, social groups etc.) and disrupting that is hard.
- dalore 10y agoYes disrupting social inertia is hard. But it's compounded in the states with medical insurance tied to their job. It's yet one more thing preventing people from moving, even if they want to. Not only that, if you move in the states you will want a job already lined up. If you build up a bunch of savings and then move to find a new job you won't be covered and so it's more of a risk.
- vonmoltke 10y agoI can tell you that medical insurance is about #5 on my list of reasons I am not moving without a job lined up. I think you are overstating the importance of medical coverage and understating the other factors that come with an out-of-area move.
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- Amezarak 10y agoJust idle curiosity, but why did you choose Nebraska? The top five states in which a hundred goes farthest, are, according to the article, Mississippi, Arkansas, Alabama, South Dakota, and West Virginia. It doesn't really change your point (I don't suppose Californians would enjoy our summers any more than they would enjoy Nebraskan winters), but I wondered. The absence of a table makes it hard to tell what the absolute order is, but Missouri, Iowa, Oklahoma, South Carolina, and Ohio also come out ahead of Nebraska, putting it at least at 11th.
- galdosdi 10y agoThere's also probably a lot fewer jobs for cleaning ladies (or any job) in Nebraska. Unless you're independently wealthy you don't get to choose a place; you just get to choose a (place, job) tuple. Yes, this is still an example of economics explaining stuff.