It now costs $350,000 a year to live a middle-class lifestyle in a big city

[Chuckanut]

What bothers me about this article is how they conflate "middle class" with "spending everything I make".

+1

Another great example of the low quality reporting that infects the modern news media.

 

[Sojourner]

A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits

I have to tip my hat to that janitor. According to the article, his base salary for a 40 hour week is about $56K. Dude picked up O.T. hours on an almost daily basis that other janitors turned down. He probably worked most holidays, as well.

Still pretty hard to believe, IMHO. I'm sure it's possible to significantly boost your income as a BART janitor by working lots of overtime... but more than quadrupling it?? Assuming he made double his hourly wage while working overtime, he would have had to work an additional 3,175 hours over his standard 2,000 yearly hours to get to $234k. That's about 100 hours per week, every single week. Even if he worked 6 days/week every week, that's still over 16 hours/day. Pretty difficult to imagine that.

 

[candrew]

Still pretty hard to believe, IMHO. I'm sure it's possible to significantly boost your income as a BART janitor by working lots of overtime... but more than quadrupling it?? Assuming he made double his hourly wage while working overtime, he would have had to work an additional 3,175 hours over his standard 2,000 yearly hours to get to $234k. That's about 100 hours per week, every single week. Even if he worked 6 days/week every week, that's still over 16 hours/day. Pretty difficult to imagine that.

It maybe hard to believe, but true based on reporting from the S.F. Chronicle:

https://www.sfchronicle.com/bayarea...in-janitor-overtime-after-public-12873558.php

One system service worker, BART’s title for janitors, made a little more than $271,000 in 2015, with $162,050 of that in overtime. A year later, two other BART janitors joined him in collecting more than $100,000 in overtime pay in a year.

Three years later — after the tale of the high-earning BART janitor became legend and the transit system, and the man himself, became an object of criticism — BART seems to be getting a handle on janitorial overtime, although a handful of its system service workers are still doing quite well.

Compensation data from 2017, obtained through a public records request, show that none of BART’s 138 janitors made more than $100,000 in overtime pay, although five of them made more than $100,000 in total pay compared with 50 in 2015 and 12 in 2016.

 

[Midpack]

BS. didn't read the article, don't need to. sister and her hubby live in chicago, are absolutely middle class and while i don't KNOW i do KNOW what they do and there's no way they make anywhere near $350k.

Chicago is a bargain compared to San Fran...

 

[bigreader]

Live in the Bay Area, read the article and think that it is pretty accurate. It is an expensive area precisely because it offers great business opportunities and cultural and natural amenities. Yep, parking is limited. Yep, homelessness and income inequality is glaring. But for at least for this nano minute in our collective history, many more affluent people want to live here than can fit. As a result, it costs and there are no "deals" in housing (rent vs. own) other than extending your commute.

I think that Maenad has it exactly right. The problem is in the headline. The 2 working parents, two kids in day care/private school/home in one of the most expensive housing markets is not a middle class life. It's an upper-class life for people without inherited wealth. It's not a carefree day at beach and that might surprise folks who think that a higher salary fixes everything. But it certainly doesn't resemble the working/middle class life that I grew up in.
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[timemoveson]

Live in the Bay Area, read the article and think that it is pretty accurate. It is an expensive area precisely because it offers great business opportunities and cultural and natural amenities. Yep, parking is limited. Yep, homelessness and income inequality is glaring. But for at least for this nano minute in our collective history, many more affluent people want to live here than can fit. As a result, it costs and there are no "deals" in housing (rent vs. own) other than extending your commute.

I think that Maenad has it exactly right. The problem is in the headline. The 2 working parents, two kids in day care/private school/home in one of the most expensive housing markets is not a middle class life. It's an upper-class life for people without inherited wealth. It's not a carefree day at beach and that might surprise folks who think that a higher salary fixes everything. But it certainly doesn't resemble the working/middle class life that I grew up in.
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Sam's post was very accurate in describing what you get and how you might live at that income level in a place like SF (or any number of similar VHCOL cities in US or abroad).

Lived it for 10 years with kids and all the trappings and I know many who live it the same or very similarly, on that income.

It's not an argument. There is no mystery to it; the math defines it all very clearly - assuming that is how you have chosen to maintain your lifestyle and approach to wealth accumulation.

Calling it "middle class" is a point of contention. It is not, in SF or anywhere else.

 

[Another Reader]

I live in suburban Silly Valley. Run of the mill tract homes start at $1MM for something small in an ok school district. My neighborhood has very competitive schools, thanks to all the Asians and South Asians that have moved here. Houses here start at $1.5MM. Private schools for lower grades start around $36k. College, even UC, is very pricey. Food is a bit higher than Phoenix, except restaurants which are definitely higher. The fabled benchmark Egg McMuffin is $4.89 at the local McDonalds here, vs. $3.19 in Phoenix. Grocery stores are a little higher overall, but the high income folks don't cook much unless someone is at home.

Compensation for the senior software engineers seems to start at $250k and go up from there. Total compensation with the right company seems to center around that $350k number. A person in a lesser position or in a different occupation in a tech company is probably pulling down at least $150k. Lots of $500k income households if both people are working.

I bought my house 30 years ago for around $350k. No way could I afford to buy any house or almost any condo today on what I made in salary or what I would be paid today for the same job.

Sam (the article author) tends to focus on the high wage earners living in SF and he does seem to like to brag. He leveraged his SF real estate investments well and they added a lot to his net worth. He has his blog and some other business investments, plus his nest egg from the investment banking career. He's probably worth $10MM at least if you include the blog, maybe more like $20MM based on some of the numbers he throws around.

You could not pay me enough to be a janitor for BART...

 

[Another Reader]

Sam's post was very accurate in describing what you get and how you might live at that income level in a place like SF (or any number of similar VHCOL cities in US or abroad).

Lived it for 10 years with kids and all the trappings and I know many who live it the same or very similarly, on that income.

It's not an argument. There is no mystery to it; the math defines it all very clearly - assuming that is how you have chosen to maintain your lifestyle and approach to wealth accumulation.

Calling it "middle class" is a point of contention. It is not, in SF or anywhere else.

SF is becoming more like New York. It takes a lot of money to live what would be considered a middle class lifestyle elsewhere. Yes, there are "trappings," but some are required to insure your kids get a good education and you have a decent place to live.

 

[jkern]

I have lived in the SF Bay Area my whole life and it's certainly possible for a family of four to have a middle class standard of living on $350K per year. However, I would classify it as a good middle class. Totally capable of accumulating wealth over time and becoming upper middle to upper class.

 

[meierlde]

We used to visit SF all the time in the 70s and 80s by doing road trips. Back then, I could find a free street parking spot right in Chinatown if I drove around a bit.

We passed by SF a few years ago on an RV trip. I took the toad into the city, and could not find a place to park. And having been there many times, it lost the appeal. So, we did not spend much time there to see the homeless problem that is so well known.

Of course if the operating time of bart fit one could stay on the east side of the bay or livermore and commute into the city. Basically this is similar to staying at newark ap and commuting to Manhattan.

 

[daylatedollarshort]

I would say our kids had an upper middle class life growing up in the Bay Area - Hawaiian and European vacations, good schools, maid service, gardener, nice house, etc. When they were little I stayed home with them and they went to city sponsored or church preschools so there weren't any expensive day care bills. They certainly had a lot fancier life than I did growing up. Later on they went to after school day care on their public school campus. We did buy a house when prices were lower but even spending $1M more on a house these days we would still not come close to $350K in annual expenses for us.

Now that our kids are grown and we aren't working our expenses are relatively low - $2 a month ACA plan, low property taxes from Prop 13, we do our own house and yard work now, low energy and water use home, kids went to community college and in state schools with grants, plant based diet, and cheap dates. I just checked and there are 175 events on Goldstar with $25 tickets or less, my main seat filler subscription has about 100 events listed, my $20 senior state parks pass is good for 280 state parks, the library has free tickets to around 50 cultural attractions, and there's a ton more to do between all my other passes and the free / cheap event lists. We looked around before we retired and except for housing we didn't see our expenses being much lower elsewhere.

 

[24601NoMore]

Here are just a few of the howlers that jumped out at me..

- Childcare plus occasional babysitting for 2-year old...$29,400 (!)

- Preschool for 4 year old - $24,000 (SERIOUSLY?!!)

- Food for 4 ($70/day average) - $25,548 - are they eating Wagu beef every day? Our food budget for 2 is ~$500/mo and even that is high when tracked against actual expenses..and we eat pretty darned well.

- Entertainment - $6,000/yr (really? $500/month?)

Anyway..

 

[karen1972]

I have no doubt they all this money, the question is since when did private schools become middle class lifestyle, when did eating out all the time become standard middle class lifestyle, etc.

The reality is they are upper middle class which is fine, but I think calling these things "middle" class is a far stretch than what the majority (which use to middle class) lives... ie mean middle class use to mean middle of the overall population. I do not believe that the "middle" of the population even in the most expensive places actually has a $1.8M house in the US. The median home price in Manhattan from what I could find is $1M, if that is true then this 'example" family has a house significantly more expensive than that. Which also means their property tax is also significantly higher.

 

[24601NoMore]

I just saw a linked article on a couple in NYC that earns $500K/yr and "still end up with very little besides 401K money".

https://www.cnbc.com/2018/03/06/bud...e-that-makes-500000-a-year-but-cant-save.html

Where to even start..what's this guy trying to accomplish? His credibility is seriously diminished with articles like these.

 

[Mr. Tightwad]

never forget some dude at the basketball court when I was younger showed up in a BMW, I said, nice car, he responded "I can have anything I want, I'm single!"

LOL.

The dude is correct. I stayed single and retired at 45. I drive 2 Tesla's. It's easy to accumulate wealth if you don't get married.

And as someone pointed out, the author of the article specializes in clickbait journalism. I gave up on him a long time ago.

 

[Music Lover]

Take out childcare/school costs and you’re easily down to 75. Lower if you have a nanny but still want to send a child to some form of preschool a couple of days a week.

Eta, then another 20k for property taxes if that 36k is towards a mortgage.

They stated that they rent for $1775 so no additional property taxes and no mortgage. A generous $30k for child care still leaves $90k+ every year.

 

[MarieIG]

Deleted.

TMI

 

[jkern]

I have no doubt they all this money, the question is since when did private schools become middle class lifestyle, when did eating out all the time become standard middle class lifestyle, etc.

The reality is they are upper middle class which is fine, but I think calling these things "middle" class is a far stretch than what the majority (which use to middle class) lives... ie mean middle class use to mean middle of the overall population. I do not believe that the "middle" of the population even in the most expensive places actually has a $1.8M house in the US. The median home price in Manhattan from what I could find is $1M, if that is true then this 'example" family has a house significantly more expensive than that. Which also means their property tax is also significantly higher.

I grew up in San Mateo and what virtually everyone would consider a middle class house is priced between $1.3M to 1.8M. Probably not the middle of the population living in them unless they were purchased long ago.

 

[jkern]

Here are just a few of the howlers that jumped out at me..

- Childcare plus occasional babysitting for 2-year old...$29,400 (!)

- Preschool for 4 year old - $24,000 (SERIOUSLY?!!)

- Food for 4 ($70/day average) - $25,548 - are they eating Wagu beef every day? Our food budget for 2 is ~$500/mo and even that is high when tracked against actual expenses..and we eat pretty darned well.

- Entertainment - $6,000/yr (really? $500/month?)

Anyway..

That's actually pretty close to our entertainment budget. It's very easy to go through that much per month. I include dining out as entertainment because that's what is to us. I also include hosting a party and weekend getaways in this category.

 

[W2R]

I am fine with living a middle class lifestyle.

But frankly, I don't think it would be worth $350,000/year to live anywhere on the face of the earth, much less in one of our largest, and probably filthiest, US cities. I mean really, feces on the sidewalk? I could go on. The only reason I can think of to live in a big, expensive city like that would be if a relatively high paying job was there for me, and if I could not possibly earn that much pay living elsewhere because my capabilities are not sufficient to demand it. I think that is probably the case for many who live there. If a middle class person with a mid level job is making $350K/year, it's not unreasonable to expect that he/she might spend $350K/year.

Life is easier in retirement.

We are lucky to be living in New Orleans, a small city. Yes, it has its disadvantages too, and this is definitely not the place to come for a high paying job. Still, we have a lot of the advantages that big cities have; art, theater, history, the food, and OMG the music here! It's amazing. No wonder so many music genres were born here. Countless musicians end up living and playing their music here at some point. You can hear them playing for free on many corners throughout the French Quarter. Similarly, there are a plethora of artists that are painting and selling their art for peanuts in Jackson Square and elsewhere, not to mention mimes, dancers, and so much more. There is more high quality art and entertainment here than you can shake a stick at.

Most middle class people here send their kids to Catholic schools whether they are Catholic or not. There are a few other private schools but not many. Some middle class kids attend public magnet schools.

Many great people grew up hanging around on Bourbon St. and the like, and despite that they somehow managed to turn out to be productive, law abiding citizens. Nevertheless I do not think that this is a great place to raise kids and I would not choose to live here if I had kids at home. Most of my co-workers with kids chose to live way up on the north shore of Lake Ponchartrain and endure the commute from h*ll back and forth across the 23 mile long Causeway Bridge. Up there, public schools are supposedly better and the environment is apparently a healthier one for kids. I wouldn't know.

 

[Major Tom]

although I will say it ain't cheap to live near SF/NY/DC.

Tell me about it. For the last 10 years, I've been living in the SF East Bay (Oakland, to be precise) on $17K - $18K/yr. Now, because I purchased a used campervan, my annual COL is going to go up to something in the region of a whopping $24K - a veritable fortune! To be fair, I'm single, with 3 cats and cheap rent (for the area). On top of that, I am satisfied with a very modest material standard of living. Sometimes, I look at what is termed a middle-class standard of living, and it looks quite luxurious.

Sorry if this post seems a little like inverse snobbery - that wasn't the intent. It just doesn't take much to make me happy, which can be considered both an advantage and a flaw. I'm sure that if I had a partner, kids, and a house, my annual spend would be much higher.

 

[Finance Dave]

Chicago is a bargain compared to San Fran...

True, and smalltown USA is a bargain compared to Chicago LOL.

There is usually somewhere less expensive. I'm very happy with our COL in my small Indiana town, but admittedly there's not as much to do in small towns like ours.

 

[Finance Dave]

It's easy to accumulate wealth if you don't get married.

Not sure where you get that from. My wife earned nearly as much as I did during our careers, which allowed us to save a lot more.

2 incomes, one house, one dishwasher, one refrigerator, etc....many expenses are "fixed" whether for 1 or two people. You must be alluding to some other facet of marriage that you've not explained.

 

[W2R]

True, and smalltown USA is a bargain compared to Chicago LOL.

There is usually somewhere less expensive. I'm very happy with our COL in my small Indiana town, but admittedly there's not as much to do in small towns like ours.

You could go to a larger town like New Orleans, where there is lots to do. But also there is probably more crime and more corruption in a place like this. It's always a trade-off.

 

[NW-Bound]

My wife worked and earned less than I did.

If I were single, would I have more money? Hard to say. Would I be even more frugal by myself, or blow all the dough because I had no dependents who relied on me?

It's hypothetical, and I never ponder this question till reading the above posts about marriage and wealth accumulation.