cost of living

Laura at 11d and Megan McArdle are going back and forth about child care subsidies today.  The comment that struck me was this one from "buffpilot" at Megan’s blog:

"We don’t need to give a subsidy to anyone, but making a means-tested
welfare, would be fine with mean. But base it on the income needed in
Mississippi – since you can move! If you want to live in NYC make the
money, don’t have kids, or move. Its YOUR choice. But don’t ask me to
give you money so you can live your lifestyle without making any
sacrifices. That’s what you want."

Similarly, when Bitch PhD posted last month about how unaffordable housing is, even given that her family has a good income, she got lots of "that’s what you get for living in California" type comments.

I really don’t have a good answer for the public policy question of how to handle cost of living disparities.  As has been pointed out repeatedly during the SCHIP discussion, a family in NYC living on $60,000 is in a fundamentally different situation than a family in Iowa with the same income.  But at least some of that difference is a matter of choice.  Are you willing to tax an Iowa family with a potentially lower income level to help that New York family?  Or do you tax the New York family more?  In spite of the federal tax deduction for state income and property tax payments, richer states — with higher costs of living — tend to pay more in federal taxes than they get back.  This is justified in the name of progressivity. But if you you take the cost of living argument seriously, progressivity might cut in the other direction.

13 Responses to “cost of living”

  1. Hazel Buchmacher Says:

    I’m not sure I have a good answer for the policy problem of child care subsidies and varying costs of living, either … but I’m also not sure where one lives is as much a matter of choice as we think.
    If I live in NYC, and work as a firefighter or public school teacher — 2 professions which I’d hardly consider unskilled or low-paid, but don’t in themselves pay enough to make ends meet in many high-cost areas — is buffpoint *really* suggesting that I either shouldn’t have kids, or should move somewhere else? That doesn’t seem reasonable to me.
    For starters, most of us do have at least some geographic constraints on where we live. I’d wager that most of the folks in this situation who struggle with child care costs didn’t take out a map of the US, conduct a thorough, well-considered analysis of all the places they might possibly live, and then pick NYC (or DC, or SF, or Boston, or … ) just because it sounded cool. They’re there because that’s where they were born and raised, and that’s where their families are. Some of them may honestly need to be close to their extended families; for example, to help care for an elderly or disabled relative, or because they themselves count on extended family to help with some of their child care needs. Others technically could move, but there’s still a nonpecuniary cost of moving away from family that may be worth it if you’re a tenure-track college professor or VP of a Fortune 500 company … but considerably less so if you’re an admin assistant or union plumber (and even less if you’re a hotel housekeeper or retail clerk).
    And let’s just say, for the sake of argument, that everyone in jobs like this who wanted to raise kids took buffpoint’s words to heart, and up and moved to Mississippi. What then? My guess is, either the demand for fairly skilled, moderately well-paid jobs far outstrips their availability or, if there’s enough of an influx that the whole local economy grows, the cost of housing and child care there’s going to start going up, too.
    Lastly, is it really good public policy to say if people in these positions can’t afford to raise kids in many of our metro areas, they can just move? Do we really want that? Several US cities are already having real problems hiring or retaining teachers, police, etc. because these jobs just don’t pay enough to live on in those areas. If we agree that safe communities and good schools benefit all of us — even the lawyers and engineers and doctors who can afford a higher cost of living — shouldn’t we find some way to support that? Or are we truly comfortable with a growing gap between haves (those who can afford private security and private schools) and the have-nots (which becomes an increasingly larger group)?
    Again, I don’t know what the answer is, but I’m pretty sure “Just move, dang it!” isn’t it.

  2. nate Says:

    This is such a short-sighted argument (as Hazel mentions); people who are *relatively* low-paid in in DC or NYC are often doing work that benefits people far away. I live in Madison, WI (not exactly the highest cost of living, but surprisingly not as low as you’d think). Childcare is tough here–but the work that I do benefits people living in the far reaches of the state. It’s not just taxing people in Iowa so that people in DC can keep their standards of living–it’s sharing a burden so that people in DC (or wherever) don’t have to choose between what they do and where they live.

  3. mom Says:

    Ditto Hazel — we do have choices, but these choices are within constraints. I actually tried to find a job that would move me away from my former urban locale because it was so costly. I did find another job, even a better job, but in one of the only MORE costly places to live in the country. And here I sit.
    Choices are made within constraints. Not to mention those who are the worst of financially are also the least able to take advantage of the “choices” available — moving is an expensive endeavor!

  4. Wayne Says:

    A job that pays $60,000 in NYC likely will not pay $60,000 in, I don’t know, Mississippi.
    I can be a teacher in Boston, for example, and make in the neighborhood of $60-70,000 a year. But I live in Central MA, and make around $50,000 instead. If I worked in Western MA (where I live, because I can actually afford to live there), I’d make $35,000.

  5. Wayne Says:

    Oops — should read, I WORK in Central MA. I don’t live there.

  6. Lee Says:

    I don’t think we can underestimate the benefits to society when people live amongst their support structure, not always, but often extended family.
    The very expensive places to live almost all have one things in common: plentiful jobs.

  7. Hazel Buchmacher Says:

    True, Wayne, but in some cases, you can still have a higher standard of living in the lower-cost area, even if your salary is a bit lower.
    For example, I live in a small, non-metro-area town in the Northeast, and work in higher ed administration. 2 years back, I interviewed for a job comparable to the one I had, with a different college in a much higher-COL metro area. Taking the job would’ve meant a salary bump of 25-30%; DH would have moved with me and probably seen an even bigger bump. But our housing costs would have gone up somewhere between 200 and 300%. We make a bit less living where we do now, but our standard of living (not to mention quality of life) is a lot higher.
    (I’d like to say I took the high road and rejected the higher-paid job for this reason, but truth is, the other college spared me the tough decision by not making me an offer … )

  8. landismom Says:

    I think it’s also important to recognize that the choice that some people make to live outside the most expensive areas can also lead to needing more access to childcare, especially if what they’re doing is commuting to a job in a high-cost area. Someone who decides to live in Weehawken and commute in to mid-town is going to potentially need childcare for a longer amount of time every day than someone who both lives and works in Manhattan.

  9. Andrea Says:

    Also missing is the realization that many people living in urban areas don’t have the choice to live elsewhere because they are dependent on the urban infrastructure–folks who can’t drive due to physical disabilities, for instance. People with ongoing physical or mental health issues who require access to appropriate medical care. People who belong to an immigrant group with a significant presence in one urban location but not elsewhere. The “just move” argument presupposes a “normal” person in a “normal” situation–and surely we are not about to penalize people who don’t fit that standard?

  10. bj Says:

    The discussion of moving always reminds me of a casual conversation I had with a young mother when I was a young graduate student.
    We were on a vacation trip across the country to Seattle, on the “Empire Builder” Amtrack track. To me it was grand adventure. I was rooted no where, had seen big mountains for the first time, and was simply amazed with Seattle (plotting how one might live there).
    I voiced as much to the young mom who was moving to Seattle, and she voiced dismay and unhappiness at leaving her town in Montana (or somewhere else on Amtrack’s route). But, she had to go where she could find a job.
    The idea that one moves to where the jobs are is pretty much ingrained in an academic, but it’s a difficult thing to ask of many. And, people leave low cost areas because they can’t find jobs there.
    It’s a myth to imagine that all people who move to high cost areas are looking for bright lights and the big time.

  11. Elizabeth Says:

    For what it’s worth, the tax code does subsidize *affluent* people who live in higher cost of living areas, through the mortgage interest deduction and the deduction for state and local taxes. (Low-income people don’t benefit from these much, because they’re generally better off going with the standard deduction.)

  12. Helen Says:

    For starters, most of us do have at least some geographic constraints on where we live. I’d wager that most of the folks in this situation who struggle with child care costs didn’t take out a map of the US, conduct a thorough, well-considered analysis of all the places they might possibly live, and then pick NYC (or DC, or SF, or Boston, or … ) just because it sounded cool. They’re there because that’s where they were born and raised, and that’s where their families are. Some of them may honestly need to be close to their extended families; for example, to help care for an elderly or disabled relative, or because they themselves count on extended family to help with some of their child care needs. Others technically could move, but there’s still a nonpecuniary cost of moving away from family …
    Continuing this theme, I wonder if “buffpilot” has considered the position of working class / poor people who were in a place first -and then that place gentrified, as with so many others.
    Thought not. Pfft.

  13. Helen Says:

    Sorry, the first part of that was a quotation from Hazel, but the italics tags failed to work.

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