A somewhat meandering follow-up: I have an idea that isn’t fully clear in my head, but I want to share the rough idea of it. I think that one of the difficulties is that when we use our own life examples there are often many hidden benefits that don’t get calculated clearly/directly into the income. Some things can be roughly calculated if we put some effort (health insurance, the quality of housing, how stably is the job, the length of commute), and some things are really really hard to put a price on (having a family support network, local knowledge of which shops sell cheap vegetables that are still good quality, speaking the local language well-enough to make friends).
Maybe an economist would think of these as “investments in human capital.” If a person has these things, it is really easy to forget how hard it is to exist without them. I think of the cliché of a millionaire pretending to slum around as a homeless person. But to be serious: if a person has a university education, and a strong professional network, healthy emotional relationships with family, and good physical health, and professional stability, and a well-funded retirement account, it can be really hard to imagine life without those things. If a person hasn’t had all these “investments in human capital” then it is really really challenging to make a good life situation for yourself. When I think about a person living in an expensive city on $15,000 or $20,000 per year, I wonder how much has been invested in these people so that they are able to live so frugally. How different does it look if a person lacks that investment?
Could I live on 40k in NYC if I had all of the above-listed “investments?” Probably, yeah. Could I do it if I had none of them? I bet that I wouldn’t be able to.
A somewhat meandering follow-up: I have an idea that isn’t fully clear in my head, but I want to share the rough idea of it. I think that one of the difficulties is that when we use our own life examples there are often many hidden benefits that don’t get calculated clearly/directly into the income. Some things can be roughly calculated if we put some effort (health insurance, the quality of housing, how stably is the job, the length of commute), and some things are really really hard to put a price on (having a family support network, local knowledge of which shops sell cheap vegetables that are still good quality, speaking the local language well-enough to make friends).
Maybe an economist would think of these as “investments in human capital.” If a person has these things, it is really easy to forget how hard it is to exist without them. I think of the cliché of a millionaire pretending to slum around as a homeless person. But to be serious: if a person has a university education, and a strong professional network, healthy emotional relationships with family, and good physical health, and professional stability, and a well-funded retirement account, it can be really hard to imagine life without those things. If a person hasn’t had all these “investments in human capital” then it is really really challenging to make a good life situation for yourself. When I think about a person living in an expensive city on $15,000 or $20,000 per year, I wonder how much has been invested in these people so that they are able to live so frugally. How different does it look if a person lacks that investment?
Could I live on 40k in NYC if I had all of the above-listed “investments?” Probably, yeah. Could I do it if I had none of them? I bet that I wouldn’t be able to.