What's up with that?
2007-09-10 09:29:11 · 5 answers · asked by Laycey L 1 in Business & Finance ➔ Personal Finance
The government just sucks that much.
2007-09-11 00:51:57 · answer #1 · answered by GoodBadGuy 2 · 0⤊ 1⤋
Because the things that go into "cost of living" are basic needs, demand is extremely inelastic (particularly when supply is limited), which is to say that when prices go up, people will still consume them. Cost of living is almost always a function of supply vs demand. In a city like New York, the demand for housing is high, yet the supply is fairly limited, so people are willing to pay more to live in New York.
It also goes the other way, demand is also driven by the availability of good jobs, so while you may be able to live a luxrious life in Iowa for $100K/year, the number of $100K jobs there are extremely limited, and salary data only reflects existing jobs and not their availability.
In the bay area, $100K jobs are much easier to come by, and while the average person living here pays a larger percentage of their salary towards housing, it's still on the edge between being able to make it work vs going totally broke doing it.
In other words, six figure earners in Iowa can live well spending 15-20% of their pretax income on a mortgage, whereas people in larger cities may spend 40% or even more on tighter accomodations. They're saving less money but still make the tradeoff for various reasons.
2007-09-10 09:46:37 · answer #2 · answered by Nick N 5 · 1⤊ 1⤋
It depends on where you live. In the USA it's not possible for a single working person with a reliable car and a full time job to pay for a 1 bedroom or studio apartment in cities like NYC or Los Angeles. This is if you have a minimum wage job of $7 an hour. It's less in other States. Some states can pay as little as $5 an hour and get away with it. Many jobs only pay less than $15 an hour. This is not enough money to get by alone in Los Angeles. Said individual would have to live with parents, friends, or relatives. Or possibly split the rent 4 ways for a 4 bedroom house or apartment.
2007-09-10 09:40:08 · answer #3 · answered by ev1go 2 · 1⤊ 1⤋
Why would it? Salary is what you sell your labor for. Cost of living is what you pay for whatever. My goal (and yours if you are honest) is to earn MORE than is need to spend.
2007-09-10 12:47:56 · answer #4 · answered by STEVEN F 7 · 1⤊ 0⤋
You know, it does match. Everyone chooses their own life style , so therefore they control the cost as well. On the flip side everyone chooses their own careers, and therefore control their income.
If you are not matching you obviously made a mistake on one or both of your choices.
2007-09-10 09:49:40 · answer #5 · answered by Landlord 7 · 1⤊ 2⤋