Not necessarily. 2007 was a financial crisis which resulted in another tech industry crash, so lots of people were searching for new jobs at the time and couldn't get anything good
I checked the stats for my current city and I have to question just how their calculating their housing costs... It's not even close to what's actually on the market at the moment.
I just checked, I live in Phoenix, in maricopa county, I’m pretty sure lumping together people living in Maricopa, Phoenix and the suburbs is not valid, you can’t commute across the county, it’s not a single market.
A bit ironic but Maricopa, AZ isn't actually part of Maricopa County; it's in Pinal County.
EDIT: Also worth noting that it's a ~45-60 minute commute from Maricopa to Boeing in Mesa. I make an equivalent commute every weekday--at interstate speeds for 60% of the route--and don't even leave my city proper. The commute isn't as unrealistic as you might think.
Maricopa to Boeing is basically 1/4 across the city. Try commuting from Maricopa to Discover at I-17 and the 202. That would be an hour and a half to two hours each way.
I’ve found numbeo to be practically useless for most cities I’ve been to and stayed. MITs calculator is much more accurate, especially if you are someone who doesn’t earn a high wage.
Most people aren’t going to stay in Greenwich village/SOHO/UES if they are in NY, or similar elsewhere. Prices reflected in the MIT calculator seem to take all areas of living into account, that too by county.
Edit: Numbers on numbeo seem to have improved a lot since the last time I saw them. Taking back my previous opinion, but I find both to be useful resources.
Numbeo has reputation of being very inconsistent. For some cities and countries it's relatively accurate, for some others it's wrong or outdated.
It's partly due to their data collecting methodology. They rely on crowd-sourced user inputs and manually collected data. I also have doubt about their analysis methodology, it's seems very ad hoc and amateurish.
You should treat Numbeo with a grain of salt. It's honest attempt with small budget and better than nothing, but you can't treat it as authoritative source.
In general I don't like the approach of remote employers basing compensation off of the employees cost of living.
What happens at gitlab if you start off in SF then move to another city? You're a remote employee and are free to work wherever... Do they then demote your pay to reflect the new city or did you just game the system?
What about the opposite case, a worker in India at gitlab moving to SF did they just lose a lot of money?
In general this cost of living approach to remote employment is a cop out to pay lower salaries and save money. Zapier offers bay area salaries to all remote employees and gitlab discriminates... Which would you want to work for?
Zapier does indexed compensation by region. E.g. They pay employees in Asia less than employees in America.
This is actually the worst of both worlds. They are paying over the market rate in some countries and under the market in others. Some of their employees are raking it in, others not so much.
What's fair or desirable about that?
I agree the housing seems low. For my county, it worked out to ~$750 a month for a single childless household. I’ve never seen a rent that low around me. I assume shared living must be on the table for this.
As for the other living expenses, and whether you’re on a hedonic treadmill:
* How many meals a month are from a restaurant of any kind?
* How many of the following do you have paid subscriptions for? Cable/satellite, HBO, Showtime, Netflix, Hulu, etc.
* Do you set your thermostat to lower than 75°F/23°C in the summer, or higher than 65°F/18°C in the winter?
* Do you buy cars new? Or almost always have a car payment?
* Any microwave meals or individually packaged snacks?
* Alcohol on any semi-regular basis?
* Coffee that’s more than 25¢ a cup?
None of the above are (moral) value judgements, but they’re really easy to get accustomed to and not consider as discretionary items.
> None of the above are (moral) value judgements, but they’re really easy to get accustomed to
Playing economic limbo with constantly updating 'how low can you go?' data as the stick may be possible to get accustomed to, but isn't necessarily very fun. Especially when gameplay becomes long-term and repetitive.
I'm not judging your list of examples in particular, but I think you may be a bit off the mark as to why threads like this appear at all.
Certainly the housing values are far below current costs for California. [1]
I assume this is because the data is averaged over what _current_ residents pay which will be dominated by mortgages taken out well in the past and perhaps affordable rentals not on the market. This will bring the average far down.
Anyone moving to or inside of California today could not survive on the Living Wages listed. Even they assume some 2/3 of post tax income going to that lower averaged housing cost.
Since others have commented that they found the expense low, I decided to check mine. In my particular county in Maryland (don't want to give the exact one for privacy reasons), the total expanses for a single adult match my experience almost exactly. Excluding retirement and other savings, the reported total expenses was with 20$/month of my experience.
The housing category seems to assume that a single adult has a roomate though.
The "typical annual expenses" have a row for housing (as they should), in which the numbers are maybe interesting if you're interested in such things:
- Unsurprisingly, a single, childless adult has the lowest housing costs.
- A single adult with 1 child pays a lot more for housing, presumably because the child requires its own bedroom.
- Adding a second child has no effect on the housing cost, presumably because the two children may share a bedroom. I understand this, but it is interesting that someone who is willing to make their kid share a room is unwilling to share a room with their kid.
- 2 adults with no kids pay slightly more than a single adult (i guess they need a little more space, but can still share a bedroom?)
- 2 adults with 2 children have EXACTLY the same cost as 1 adult with 1 child?
A single adult with no children can rent a room in a house or apartment with other friends. A couple can do this too, but some of them prefer to have their own place so this skews the average a bit. Once you have a kid it's a lot harder to find people who want to live with you so you have to get your own place. This place is apparently big enough to support up to two adults and two children after which you need a bigger place.
Would it be better to ask the mods to change the title to something like “US Living Wage Calculator”? I clicked expecting a worldwide view, and was a bit disappointed.
I often find this with HN articles. Much like the .com domain, I continue to assume a likelihood of American-focus and allow myself to be pleasantly surprised when it is a global article, service or discussion.
Perhaps that's one of the best things about code/git submissions to HN - it's often so easy to apply them to any geographic region.
There are plenty of sub-$2k 2-BR apartments to be found in NYC. I’m not sure where you’d find one in Manhattan (New York County), though. They’re mostly in the less desirable (whether because of crime or commute time to Manhattan) outer-borough neighborhoods.
Even if there are a few, it’s weird to describe that as the cost of living in the borough if only 1% of the housing stock qualifies. You’re definitely not guaranteed to be able to find an apartment at that price.
I'm not following the logic behind the annual taxes row. It blows up with child #1, increases again but not nearly as much at #2, and blows up again at #3. Wouldn't having dependents reduce your tax liability? Is this some state tax mechanism? What am I missing?
I think the taxes are based more on the income, which they are suggesting has to be more to still be livable. So even though you have more dependents, you are making more money (in order to be livable) and therefore paying more taxes.
Isn't this a lot like Socialism? It's akin to deciding on the price of a pair of gloves based on what kinds of people need it, how much they would use it, how long before they need a replacement, etc.
But instead of gloves, we're trying to decide on the cost of labor.
I know I'm dancing around a thorny issue, but I don't think this idea works, in general. Why not just let the market decide?
The market decides on wage stagnation while costs keep increasing and profit goes exclusively to the upper class. For the vast majority of people, the market doesn't do a very good job.
This is letting the market decide isn’t it? This calculator would have no region-specific wages if the USA were the kind of socialism (I think) you’re talking about.
Figuring out how much an individual (or family) needs to make to survive doesn’t need to say anything about the social, economic or political ideology. As far as I can tell it’s just saying “if you live here, basic survival costs this”
A less-discussed issue with capitalism and socialism - it is completely possible for a clever and motivated person to work out what 'should' be in a specific or even a general instance.
The issue is that there is no before-the-damage-is-done mechanism to determine if a given person's assertions are correct or not, so any system that uses those assertions axiomatically will likely fail.
It isn't socialism for this Professor to point out what the living wage would be. If an employee (or employer for that matter) wants to use these figures when negotiating a wage that is hopefully good for everyone.
If the government is going to mandate minimum wages based on what Amy Glasmeier thinks is fair, it will turn out that she isn't very good at adapting to changing circumstances and the huge variety of personal circumstance that appears in practice. Mid-range case is she would become inaccurate (or corrupt!) after a few months or years and start setting wages too low or high. That would also be socialism and would also lead to bad outcomes vs. just letting people do what looks like a good idea to them.
1. US only
2. It seems that "living" does not include almost nothing beyond the immediate living requirements and it does not take into account times you cannot work, can't find job, or simply the fact that a person is a little more than her capacity to be a machine for someone.
> It seems that "living" does not include almost nothing beyond the immediate living requirements and it does not take into account times you cannot work, can't find job, or simply the fact that a person is a little more than her capacity to be a machine for someone.
This is very much what the US mentality on social care is like, so at least it's consistent.
A "living wage" is somewhat of a misnomer because as other posters have stated it indicates zero surplus.
Really, people have a "cost of living". Their wage only has to be at least that if they have zero capital.
The idea of basically everyone having zero capital as a default state is really kind of saddening.
Not withstanding that, I find the 'living wage' discussion centres around what people get for the minimum wage e.g. can they afford a small room, a studio apartment, a small house, etc.
Really it makes more sense to look at the absolute minimum living conditions and whether they have any surplus that will give them future negotiating power, or the ability to take time off work, etc.
It doesn't have to be that much, if you can live on 15K then on 22.5K you can bank half a year's expenses per year.
What is a living wage? I live in Tanzania and people get by on $50/month and live in mud houses. All of these people are alive and have been for some time.
Similarly, I know some bums in LA whos only expenses are $5/gram weed. They live on the beach, chill in a tent, and are happy and alive.
People in Western countries have such a distorted idea what is a living wage it’s patently absurd. It includes a tv, netflix, a cell phone, a car, apartment, computer, etc.
Most people here in Tanzania would literally kill to make minimum wage in America. It would seem like paradise, a life of extreme luxury.
Americans are so myopic and don’t seem to appreciate how lucky all of them are. There’s no 99% in America: we all are the 1%.
Is this calculator assuming you’re going to retire on Social Security? Just like having loose lending standards for college causes inflation, not requiring higher retirement savings simply drives up housing costs in regions with high demand.
52 comments
[ 3.2 ms ] story [ 115 ms ] threadEDIT: Also worth noting that it's a ~45-60 minute commute from Maricopa to Boeing in Mesa. I make an equivalent commute every weekday--at interstate speeds for 60% of the route--and don't even leave my city proper. The commute isn't as unrealistic as you might think.
http://livingwage.mit.edu/resources/Living-Wage-User-Guide-a...
https://www.numbeo.com/cost-of-living/
Most people aren’t going to stay in Greenwich village/SOHO/UES if they are in NY, or similar elsewhere. Prices reflected in the MIT calculator seem to take all areas of living into account, that too by county.
Edit: Numbers on numbeo seem to have improved a lot since the last time I saw them. Taking back my previous opinion, but I find both to be useful resources.
You can change the assumptions in numbeo too, like for example if you plan to live outside the city center.
It's partly due to their data collecting methodology. They rely on crowd-sourced user inputs and manually collected data. I also have doubt about their analysis methodology, it's seems very ad hoc and amateurish.
You should treat Numbeo with a grain of salt. It's honest attempt with small budget and better than nothing, but you can't treat it as authoritative source.
What happens at gitlab if you start off in SF then move to another city? You're a remote employee and are free to work wherever... Do they then demote your pay to reflect the new city or did you just game the system?
What about the opposite case, a worker in India at gitlab moving to SF did they just lose a lot of money?
In general this cost of living approach to remote employment is a cop out to pay lower salaries and save money. Zapier offers bay area salaries to all remote employees and gitlab discriminates... Which would you want to work for?
I agree the housing seems low. For my county, it worked out to ~$750 a month for a single childless household. I’ve never seen a rent that low around me. I assume shared living must be on the table for this.
As for the other living expenses, and whether you’re on a hedonic treadmill:
* How many meals a month are from a restaurant of any kind?
* How many of the following do you have paid subscriptions for? Cable/satellite, HBO, Showtime, Netflix, Hulu, etc.
* Do you set your thermostat to lower than 75°F/23°C in the summer, or higher than 65°F/18°C in the winter?
* Do you buy cars new? Or almost always have a car payment?
* Any microwave meals or individually packaged snacks?
* Alcohol on any semi-regular basis?
* Coffee that’s more than 25¢ a cup?
None of the above are (moral) value judgements, but they’re really easy to get accustomed to and not consider as discretionary items.
Playing economic limbo with constantly updating 'how low can you go?' data as the stick may be possible to get accustomed to, but isn't necessarily very fun. Especially when gameplay becomes long-term and repetitive.
I'm not judging your list of examples in particular, but I think you may be a bit off the mark as to why threads like this appear at all.
I assume this is because the data is averaged over what _current_ residents pay which will be dominated by mortgages taken out well in the past and perhaps affordable rentals not on the market. This will bring the average far down.
Anyone moving to or inside of California today could not survive on the Living Wages listed. Even they assume some 2/3 of post tax income going to that lower averaged housing cost.
[1] for example
http://livingwage.mit.edu/counties/06001
vs
https://www.rentcafe.com/average-rent-market-trends/us/ca/al...
The housing category seems to assume that a single adult has a roomate though.
- Unsurprisingly, a single, childless adult has the lowest housing costs.
- A single adult with 1 child pays a lot more for housing, presumably because the child requires its own bedroom.
- Adding a second child has no effect on the housing cost, presumably because the two children may share a bedroom. I understand this, but it is interesting that someone who is willing to make their kid share a room is unwilling to share a room with their kid.
- 2 adults with no kids pay slightly more than a single adult (i guess they need a little more space, but can still share a bedroom?)
- 2 adults with 2 children have EXACTLY the same cost as 1 adult with 1 child?
- A third child seems to require its own bedroom.
I find this funny, because it takes several years before a child will stop actively expressing its preference _not_ to have its own bedroom.
Kids sharing rooms is somewhat more acceptable than Adult/child sharing a room. Past babyhood anyway.
I suppose the problem is it all depends on genders and ages. A 5 and 6YO sharing is probably fine. A 16 and 17YO of differing genders not so much.
Perhaps that's one of the best things about code/git submissions to HN - it's often so easy to apply them to any geographic region.
- 1 adult, 1 child
- 1 adult, 2 children
- 2 adults, 1 child
- 2 adults, 2 children
I suspect the data presumes 2 bedrooms: 1 room for parents, 1 room for children. The pattern is effectively the same regardless of state/county.
But instead of gloves, we're trying to decide on the cost of labor.
I know I'm dancing around a thorny issue, but I don't think this idea works, in general. Why not just let the market decide?
The market decides on wage stagnation while costs keep increasing and profit goes exclusively to the upper class. For the vast majority of people, the market doesn't do a very good job.
Figuring out how much an individual (or family) needs to make to survive doesn’t need to say anything about the social, economic or political ideology. As far as I can tell it’s just saying “if you live here, basic survival costs this”
Edit: Italics formatting.
And the market does decide on the cost of living. This is attempting to quantify that decision into a practical metric.
Not sure why you’d think this has anything to do with socialism.
The issue is that there is no before-the-damage-is-done mechanism to determine if a given person's assertions are correct or not, so any system that uses those assertions axiomatically will likely fail.
It isn't socialism for this Professor to point out what the living wage would be. If an employee (or employer for that matter) wants to use these figures when negotiating a wage that is hopefully good for everyone.
If the government is going to mandate minimum wages based on what Amy Glasmeier thinks is fair, it will turn out that she isn't very good at adapting to changing circumstances and the huge variety of personal circumstance that appears in practice. Mid-range case is she would become inaccurate (or corrupt!) after a few months or years and start setting wages too low or high. That would also be socialism and would also lead to bad outcomes vs. just letting people do what looks like a good idea to them.
This is very much what the US mentality on social care is like, so at least it's consistent.
Really, people have a "cost of living". Their wage only has to be at least that if they have zero capital.
The idea of basically everyone having zero capital as a default state is really kind of saddening.
Not withstanding that, I find the 'living wage' discussion centres around what people get for the minimum wage e.g. can they afford a small room, a studio apartment, a small house, etc.
Really it makes more sense to look at the absolute minimum living conditions and whether they have any surplus that will give them future negotiating power, or the ability to take time off work, etc.
It doesn't have to be that much, if you can live on 15K then on 22.5K you can bank half a year's expenses per year.
Similarly, I know some bums in LA whos only expenses are $5/gram weed. They live on the beach, chill in a tent, and are happy and alive.
People in Western countries have such a distorted idea what is a living wage it’s patently absurd. It includes a tv, netflix, a cell phone, a car, apartment, computer, etc.
Most people here in Tanzania would literally kill to make minimum wage in America. It would seem like paradise, a life of extreme luxury.
Americans are so myopic and don’t seem to appreciate how lucky all of them are. There’s no 99% in America: we all are the 1%.