I really think GP is oversimplifying, and I have lived in economically disparate areas with the same salary in each. I moved from southern California where I made roughly $60k. Then I move to the Southern US. I changed industries and settled in at $50k.

In terms of raw salary, I made $10k less, but my money went infinitely further in the South. I wasn't hurting for money in CA, but I had to be much smarter about my financial choices towards the end of the month. In the South, I always has leftover money at the salary. I mean, that 740 sqft apartment in CA for $1200 really sucked compared to that 2 BR house I was renting for $850 in the South.

His point is that commentary on the cost of living tends to oversimplify. Different regions don't just have a linear multiplier that applies to all expenses, but that's what these surface-level shallow surveys tend to imply.

What escalates in expensive areas is really just housing and other costs related to physical space, like parking and transit. As he said, Amazon costs the same everywhere. So do your cell phone and computer. Utilities, food, gas, clothing, medical, all of those really don't vary all that much. They might swing by 50% between the cheapest and most expensive areas in the US, but that's nowhere near multipliers like 3x that people try to claim from just the housing data point.

> So there's a very real, ~36K negative adjustment

After tax.

You must have an insanely huge apartment for rent to increase by $4k/m by moving to SF. But even assuming that -36k adjustment, you're much better off making $150k in SF than $80k in Kansas City.

Of course, you also have the option of downsizing into a smaller apartment. The amenities in a large city make it much easier to have a small apartment (for example, in NYC I drop off my laundry instead of washing it at home or hop around different coffee shops to work with a change of scenery). My quality of life is definitely higher in a small NYC apartment than a large Vermont house.

In many places in the US you could easily rent a 3 bedroom house with a 2 car garage for $1000. Guess how much a 3 bedroom house is in San Francisco.

>you're much better off making $150k in SF than $80k in Kansas City.

Don't forget state income tax and tax bracket. Also don't forget that some things like student loan interest aren't deductible above $80k. And don't forget that to get the mortgage interest deduction you have to actually own a house (easy in Kansas city on $80k, not in SF on $150k). The list goes on (price to get your kids into a decent school, etc) once you really start to dig into it.

SF is great if you don't mind rooming up with people or living in a tiny studio. To raise a family though... it's not so cut and dry.

In my case, 2000 square foot house in St Louis with a two car garage. A large enough place to have children comfortably, market value about 200K. I am working remote for a SF company, and I looked at relocation. Anything even remotely equivalent was a couple of million. That's way more than 5K difference a month right there.

I bought my house when I was making about 60k. My last local job paid 220K, working for a company that is now being bought by Bayer, so I have seen the difference between 80k and 150k. 80k in a cheaper place is far better, especially if you are renting.

As far as dropping off your laundry, then you also have to consider that you are spending more money per load of laundry than I do by using the washing machine.

Now, what is true is that cost of living calculations are not linear: A simple multiplication doesn't really capture the differences between making 30k, 60k, 80k and 150k in the same location: There is a point after which cost of living doesn't matter: In St Louis, for instance, I'd argue that anything more than 70K or so is just flat, past tax rate differentials, because you are talking luxuries that are about the same everywhere. That line, however, is way past 150k in San Francisco, because housing cots are nuts.

>You must have an insanely huge apartment for rent to increase by $4k/m

I meant to type 3K/mo (which is where my 36K adjustment came from). And yes, I've actually looked up housing in the Yay when I was considering a prospect there. Honestly, at the tiime I was looking for 2 bedrooms so my 3K adjustment may actually be under because now I need 3 bedrooms.

>Of course, you also have the option of downsizing into a smaller apartment.

No I don't. I have a wife and 2 children who if I can afford to give them their own room, I will.

That being said, I understand my calculations do not apply to everyone because we are not all at the same places in our lives (and may never be).

> No I don't. I have a wife and 2 children who if I can afford to give them their own room, I will.

Fair enough, I didn't mean you specifically. Once you have a family the advantages of a low-cost locale definitely become greater.

Of course, the advantage of working in SF/NYC is that by the time I'm ready to have kids I'll have enough money saved up to buy a house in a low-cost area in cash.

> Of course, the advantage of working in SF/NYC is that by the time I'm ready to have kids I'll have enough money saved up to buy a house in a low-cost area in cash.

That doesn't follow from the argument. If the COL adjustment means that the salary differential is not enough to cover the difference, you will be able to save more in the low cost location as well.

Of course all of those arguments are reductive as COL is not that easy to calculate and there may be other financial advantages to being local to the higher cost area (more diversity of work, less risk at job loss, or higher chance for a lottery style payout for instance).

> If the COL adjustment means that the salary differential is not enough to cover the difference, you will be able to save more in the low cost location as well.

That's assuming you are spending all of your income.

If you're saving money in KC (on $80k/yr) you should also be able save twice as much on $150k/yr—even if you assume a linear cost multiplier for all your expenses.