Should You Move to a High Cost of Living City?
Epistemic Status: This seems obvious to me, but my Google Fu did not bring up any previous conversations about it. Forgive me if this has already been discussed in depth somewhere, and I just missed it.
Effective Altruists should move to cities with a high cost of living.
I have seen discussions about migrating in very specific instances (e.g. Should doctors move to a different country? Should engineers move to Silicon Valley?), but I don’t think I’ve seen people ask whether it’s good in general to migrate to a city with high cost of living.
Donate More.
If your salary was constant, it would obviously be better to pay lower rent. However, cities with a high cost of living tend to have similarly high salaries (with exceptions). A job that pays $50k in Houston would pay $111k in Manhattan, if the company gave cost of living adjustments. If all your money is going towards your living expenses then this wouldn’t be important, but if you are donating a set percentage of your income (or paying off student debt, or saving for retirement), this doubles the amount you give (or pay off, or save). Even if you’re not donating a set percentage of your income, if your cost of living is less than most others in your job, then you will still end up ahead.
Be Green.
If global warming is something you care about, another factor is that big cities are significantly greener than elsewhere. Despite our ideas of big cities being pollution spewers, the high population density (a bunch of people live in a single apartment building, instead of a single family sprawled out in a large suburban home) and availability of public transportation make cities have significantly less greenhouse gas per capita. It seems like the cities with the highest cost of living do the best, which makes sense because there is a strong causal correlation between high rents, people living in small spaces, people living close together, there being good public transportation or walking availability, etc. In the US, New York and San Francisco do noticeably better than other cities.
Greenhouse Gas Emissions Per Capita for select US cities (source: World Bank):
New York City: 7.9
San Francisco: 10.1
Seattle: 14.1 <-- known for “green” culture
Menlo Park: 16.4
US Overall Average: 23.6
Build a Movement.
If building the effective altruism movement is something you care about, then you will probably also have a better opportunity to do that in a larger city, even if that requires paying higher costs of living. For instance, the two largest cities for effective altruism, San Francisco and Oxford both have high costs of living but effective altruists there can reap some social and other benefits.
So if you can work remotely or your salary is fixed, it’s probably good to be where living costs are low but for most effective altruists, it seems like the opposite might be the case.
1. Do most jobs actually account for cost of living in their salary offers, so that we can offer this as generalized advice (though of course there may be exceptions)?
2. Are the cost of living salary adjustments not as big as the actual cost of living differences? So that the job might pay slightly more in a big city, but not a full adjustment more?
3. Are there other factors I’m not thinking of which would make this NOT be good advice?
Acknowledgements: I’d like to thank Ryan Carey and Lincoln Quirk for editing, adding, proof reading, discussing, and being generally helpful. Thanks!
I think it’s probably easier to directly find which cities have the highest salaries for your line of work, than to research which have the highest cost-of-living and hope that this correlates with a high salary for your line of work.
I don’t know how the cost-of-living calculator works, but I suspect if it gives that large of a difference it’s taking a multiplier (e.g. cost of living in Manhattan is 2x cost of living in Houston). If the market is efficient, cost-of-living differences should be additive, and hence not nearly that large. This is substantiated by this completely uncontrolled correlational study in a news article (sorry) in which the difference between cities looks more constant than proportional (e.g. if median starting pay differs by 5k, then so does median mid-career pay).
The other large thing this neglects is remote jobs, which give you the best of both worlds—salary adjusted for high CoL, but low expenses for yourself. One engineer at my company lives in Montana. He makes a Silicon Valley salary and the mortgage on his three-bedroom house on multiple acres is around what I’m paying for half a bedroom in Berkeley.
This seems right to me. While I like the original post, I think it makes the point seem more counterintuitive than it needs to be. Compare with:
Should you move to a city where you can earn more? Sadly cost of living will typically increase, but for people who are donating or saving a lot, this will be outweighed by the additional earnings.
I had the impression (probably from discussion on HN) that at least in programming working remotely means making substantially less money. This might be only true at the high end: companies who pay the most generally don’t hire remote workers.
It wouldn’t be too hard to find out, though: apply to a bunch of jobs on WeWorkRemotely.
She notes that “if you can work remotely or your salary is fixed, it’s probably good to be where living costs are low”, though this remark appears under the “Build a movement” section, rather than the “Donate more” section.
The market is not efficient when it comes to where people live.
The cost of a tonne of CO2 is almost definitely less $100, and probably less than $25.. So the difference between New York City 7.9 and the US Overall Average of 23.6 is below $1500/year. That’s probably not enough to swing many people’s decisions, but it is significantly more than I expected. Using a more reasonable figure of $25/tonne, we get just under $400/year.
Relevant: Should you move to Thailand?
Could you elaborate on your reasons for thinking that high cost of living is a good proxy for movement building potential? Some of us have discussed the possibility of establishing a new EA hub, and the assumption has generally been that high costs of living are a minus, not a plus.
There’s a concept in Lesswrong culture “Is that your true rejection?” which can be positively framed as “Is that your true acceptance?”
To make claims of the form “consider doing this” or “you should do that”, I recommend only putting in reasons for which (at least some) people would actually do that thing.
I don’t predict any EA would move to a city because it is green, so I’d remove that paragraph altogether.
I do however predict many EA’s would move to a city because there are communities of other EA’s living there, so I’d emphasize that, and mention some cities and countries with many EA’s.
I would be really surprised if cost-of-living salary adjustments were near 100% of the increased cost, on average.
The way I think of it is this: Expensive cities typically make companies better able to find and attract talented workers in a close proximity, which is good for business, and they’ll have an incentive to pay extra for that. But a city is expensive because lots of people want to live there relative to the space available, and living in an expensive city is somewhat like buying an expensive car. To that extent companies would not pay for the increased cost—being able to live in that city is part of what you’re getting for working at that company.
My only “evidence” that the cost is only partially covered is only from my own job searching in various cities as a software engineer though. I don’t know what a wider reading of available data would indicate. But I suspect that cost-of-living is covered less than a simple reading of average salary/cost-of-living data, because part of that correlation will be that the average worker in a high-cost city is better than the average worker elsewhere. Also, if you account for periods of unemployment, being in a higher-cost city would hit harder during those times, which wouldn’t show up in salary/cost-of-living data.
One interesting thing is that, in my company, you do get a pay bump for cost-of-living increases if you are hired in, or are moved to, a more expensive location, but if you then move to a cheaper location within the same company, there is not an automatic cost-of-living salary decrease. I wonder if that could be a common practice in many large companies due to sticky wages.
Moving to a higher-income city (or country, obviously) to facilitate earning to give is something that people should think about, I agree. Whether or not you come out as having more disposable income is partly dependent on what you want your living standard to be. For instance, if you want to live centrally in a big house, than the increased income may not fully compensate for the higher housing costs, but if you are willing to rent a room or have a lengthy commute into the ’burbs, than it is more likely to be worth it.
Another thing to consider regarding moving to earn more is remoteness and quality of life. Jobs in natural resources, for instance, can be very well-paying to compensate for the remoteness, but the trade-off is that they are far away from civilization and have poor quality of life (ie. few amenities or women). For instance, the mining industry in Australia or America’s fracking meca of North Dakota. Even in heavy industry, there are lots of white collar jobs, eg. Engineer, accountant, human resources.