$350K salary and has to hand wash dishes...

[explanade]

OTOH, this morning on CNBC, there was some graphic about how well luxury goods are selling. Maybe the wealth effect of the stock market is back.

 

[Texas Proud]

Talking about the high salaries.... I remember this guy that I had to deal with when I was in NY.... he was the head of a small group and acted as a 'consultant' (I believe he had 5 people reporting to him, never could figure out why he was paid so much)... his overall compensation was close to $500K...

I knew many people back in Houston who knew a lot more than this guy and could run rings around him that were not even making $100K (this was about 10 years ago for reference)....


I heard through the grapevine that the guy was looking to move to the middle of the country as he was tired of NY.... but could not because he found out that even the CEOs of the small to mid sized companies were not making the kind of money he was making....

 

[Independent]

For a lot of people they have no choice, it's simply where the jobs are for their (specialized) field.

What I've read about the high income Wall Street people is that they are typically very bright and went to highly selective colleges. They are people who could have been CPAs, engineers, IT gurus, etc. There are many places in the US where you can do those jobs with modest commutes and expenses. Instead, they chose this type of Finance knowing that most of the jobs are in a few, high COL, areas.

So I think they had many more attractive choices than most people, they simply chose this lifestyle.

 

[Independent]

Interesting response from the guy...


Banker Bonuses: Wall Streeter With $350K Salary Responds To The Outrage Over His Comments | Daily Ticker - Yahoo! Finance

Second, Schiff says it takes a lot more money to live a "middle class" lifestyle in NYC today than it did when he was growing up there in the 1970s.
...
But what Schiff is describing is something that almost all Americans can relate to, assuming they can get by the sticker shock of what it costs to live in NYC: The middle class is getting squeezed and the very definition of "middle class" is changing.

It boggles my mind to that anyone would think $350k makes you "middle class". What does this author think the "old" definition of "middle class" was? and what has it changed to?

The median income for a family of four in the US is somewhere in the $70k-$80k range. That median is just about keeping up with the CPI, not falling behind.

Here's the most charitable thing I can say about the quote. The top 1% have been pulling away from the median. At the same time, the to 0.1% has been pulling away from the top 1%.
If you are in the 1% but not the 0.1%, then you see a gap widening above you. If you're trying to compete for some extremely scarce good (like housing close to Wall Street), then you find the top 0.1% is consistently outbidding you.

In such a situation, people might think things are getting worse for them (because they only look up the pyramid). But, they seem too blind to look down.

 

[W2R]

]The median income for a family of four in the US is somewhere in the $70k-$80k range.

Another statistic that is even worse: the U.S. Census Bureau reports the median household income in the U.S. as $51,914. Median household income in New York (state) is $55,603. Median household income in New York City is $50,285.

New York QuickFacts from the US Census Bureau

In addition, median per capita income for the entire U.S. is listed as $27,334. Median per capita income in New York (state) is $30,948. Median per capita income in New York City is $30,498.

 

[photoguy]

What I've read about the high income Wall Street people is that they are typically very bright and went to highly selective colleges. They are people who could have been CPAs, engineers, IT gurus, etc. There are many places in the US where you can do those jobs with modest commutes and expenses. Instead, they chose this type of Finance knowing that most of the jobs are in a few, high COL, areas.

So I think they had many more attractive choices than most people, they simply chose this lifestyle.

When I graduated from university, most the people I knew picked what they wanted to do and then went to wherever the jobs were. When you are young, you often don't think too much about COL, etc. After you get a few years down a track it can be very hard to change.

Even in a field like engineering, I would disagree with you that you can always find a job in low cost of living areas. While this might be true for some specialities, for others you are again stuck with where the employers are located (usually big cities on the coasts with high costs of living).

In my field, I'm basically restricted to SF Bay area, seattle, and few of the big cities on the east cost. There are occasionally jobs in low COL areas but if you look at the location with a long term view, there is one position with one employer and if it doesn't work out you are going to be screwed.

 

[eridanus]

"I'm not Zen at all, and when I'm freaking out about the situation, where I'm stuck like a rat in a trap on a highway with no way to get out, it's very hard,"

A lot of people can identify, or at least empathize. I think the best example of this is in the movie "Ink" when the M&A CEO is raging in his car because he ignored his child.

Maybe that's what we should be taking from this story instead of the obvious out-of-touch aspect of it? We often spend to or above our means, not matter how much we make.

 

[H2ODude]

Regarding geographic differences in income, my experience/observation is that in my field (civil engineering, likely the most vanilla of engineering yet needed everywhere) salaries in no way come close to matching the costs of high COL areas. If you're wanting to RE I'd say besides LBYM the most important thing is assessing COL vs. salary for the area. On the other hand, I wouldn't want to live in a miserable area just because it was cheap living. My son was engineering in Boston, sharing an apartment with two others, and came to Raleigh NC. Thought he'd died and gone to heaven, own apartment and money to burn. Not sure, but I don't think the consulting firm he works for recognizes the area your in for salary unless it is just something done at review time.

 

[audreyh1]

When I graduated from university, most the people I knew picked what they wanted to do and then went to wherever the jobs were. When you are young, you often don't think too much about COL, etc. After you get a few years down a track it can be very hard to change.

Even in a field like engineering, I would disagree with you that you can always find a job in low cost of living areas. While this might be true for some specialities, for others you are again stuck with where the employers are located (usually big cities on the coasts with high costs of living).

In my field, I'm basically restricted to SF Bay area, seattle, and few of the big cities on the east cost. There are occasionally jobs in low COL areas but if you look at the location with a long term view, there is one position with one employer and if it doesn't work out you are going to be screwed.

When I graduated with an engineering degree, there were a lot of jobs in the SF Bay area. The starting salaries were higher too. But I found a nice job in a nice but much lower cost of living area (at the time), and I believe I was much better off for it.

Lots of my peers in the late 70s were in engineering school because it was a ticket to a good paying job - providing you could make it through the program. In college I got the impression that most of the students in higher paying fields were there because of the money. Well over half anyway.

And I know people who dropped out of engineering school in the 80s and left engineering jobs in the 90s to go to Wall Street because "that's where the money is". I still remember our CEO gloating to one engineer who left for Wall Street about how well the engineers who stayed with the company were doing now that the company went public. Some (many?) people get dazzled and go chase the money. I don't feel that sorry for them when they fail to take the possible costs into account.

So, IMO, COL and location comes with the career decision. People flooded business schools in the 80s and 90s hoping for those "big bucks". Even the folks starting out are often making deliberate economic decisions when they choose their degree.

Audrey

 

[tryan]

So the rich AND poor have the same problem ... a victim mentality; a failure to take responsibility for your actions when things get tough.

Only difference is things are always tough for the poor.

 

[clifp]

In such a situation, people might think things are getting worse for them (because they only look up the pyramid). But, they seem too blind to look down.

Exactly right. Then they get mad when the bottom of the pyramids isn't sympathetic to their plight.

 

[obgyn65]

This person may have regrets all his life about having talked to the press. I was interviewed once for a national TV news program - I will NEVER do this again.

 

[brewer12345]

If you are in certain fields, you are restricted to certain expensive areas, unless you get really lucky. I grew up in Queens and could never afford to live in Manhattan, so I lived in Queens and Jersey and dealt with horrific commutes for many years (an hour and 45 minutes each way that costs 500 a month sound like fun?). Even those places are not cheap. 10k in real estate taxes on a small house in Jersey is common (even considered cheap in some places). So if I was going to put up with all this, I expected to be paid outlandishly well. Unlike the fool in the article, I saved my money and when the music stopped I was able to land a good job in a lower cost, higher qol area. Not everyone can get out of dodge. But if you think living in an area like NYC is a picnic with a family, you are quite deluded.

There is high pressure to spend as well. I was encouraged to park my happy station wagon way in the back of the lot in Greenwich and when I walked into any shop but the hardware store or the fish place I would routinely be ignored (outlet store couture did not measure up). It is very real and you feel it every day. Most people give in to it. I always knew I was a fishmonger's son two generation from woodchuck for dinner (if you were lucky) but that is rare in an industry where you must pump your ego for the fight to get ahead.

Walk a mile in the other guy's shoes...