>an economist at the job-search company Indeed, finds that when salaries are adjusted for local costs of living, the average worker actually makes less in New York City or Los Angeles than in Toledo, Ohio or Birmingham, Alabama:
Particularly impressive considering that the "average" for NYC, LA, SF includes a lot more very high salaries than Toledo and Birmingham (Google, FB, etc are not hiring hordes of SREs making six figures in the latter).
I was just doing this calculation the other day, for a bit of background I am in an area of the Midwest, close to Toldeo and am graduating in May.
I interned in NYC last summer and sublet there. So I was trying to decide whether to move out that way or stay in a smaller Midwest city to start my career in.
When you factor in cost of living, rental costs, junior level developer salaries, taxes, and transportation costs. I found that I would need to make around 20k more than the average junior level developer salaries for NYC (according to the estimates I've been seeing listed on Glassdoor) to get as much take home pay after expenses as I will make staying in the Midwest for less pay.
I assume (and plan on calculating this) that you could easily generalize this to most cities in the Midwest with a minimum of 500k people.
I went from living in the city and commuting via rail, walking to the grocery store, etc, etc to owning a house an hour out of the city, commuting via car, etc, etc.
The mortgage payment is about the same as my rent. Even after all the additional costs of home ownership I am able to save more money. Then there's the quality of life improvements. I have 1500sf instead of <500. I don't have to plan my grocery shopping around the weather. My girlfriend can have a pet (and I can have a happier girlfriend). Etc. etc.
I'd like to propose that "cost of living" calculators are extremely skewed when trying to compare extremely urban (nyc etc) vs less (or non) urban areas. For example manhattan might have incredible price/sq ft for rent; but you can get much smaller accommodations than you might Birmingham. Car + car maintenance + car insurance is a cost that's only required when you live somewhere without public transportation/walkable grocery stores. In addition non local goods are typically not factored in when talking about cost of living. Consumer goods, health care, travel, and retirement savings all are generally local independent. In this regard being able to save 10% of 200k is a large improvement over being able to save 10% of 60k.
On your last point I can't speak for Toledo, but I wouldn't discount the number of high skill workers in Birmingham. At least 4 years ago there was small but growing tech scene.
Particularly impressive considering that the "average" for NYC, LA, SF includes a lot more very high salaries than Toledo and Birmingham (Google, FB, etc are not hiring hordes of SREs making six figures in the latter).