$160k/yr works out to around $8,600/month after taxes, deductions. Subtract $3,000 for his rent and ~$300 for utilities he’s left with $5300/month… not really a ton of money left over if he has a family, but I wouldn’t call that “scraping by” either.
The Guardian: "Scraping by on six figures? Tech workers feel poor in Silicon Valley's wealth bubble"
Probably more of a status thing for a lot of people. I don’t get it either… Seems ridiculous to pay more money to put up with more traffic, more people, more pollution, and arguably, a lower standard of living.
For my son, it means doing work he loves in a geographic area that he loves. It’s not about status.
Outside of California, Oklahoma, or North Dakota, someone who leaves or loses a job is likely to be limited by an employee non-compete agreement from finding many other jobs at employers that could possibly be competitors to the former employer.
DH didn’t have an issue changes jobs in the same high tech field in MA.
No, they were presumably chosen to make a sensational story. In reality, lots of people live in the area on incomes much lower than $160,000.
https://data.ftb.ca.gov/PIT-Charts/California-Median-Income-by-County/6gsn-ex6f/data shows the median income (on tax returns) by county:
$36,338 Santa Cruz
$46,217 Alameda (includes Oakland)
$48,219 Contra Costa
$49,777 San Francisco
$51,937 Santa Clara (includes San Jose)
$53,972 San Mateo
Some people live in “less desirable” (less expensive) areas.
Some older people have paid for or most paid for houses.
Some younger people live with parents or share housing with other people.
Here is a listing of median rental costs for 1 and 2 bedroom apartments in cities in California in 2016: https://www.apartmentlist.com/rentonomics/california-rent-report-rentonomics/
For 2 bedroom apartments:
$1,810 Richmond
$1,870 Concord
$1,900 Martinez
$1,990 Hayward
$2,000 San Leandro
$2,450 Walnut Creek
$2,560 Pleasant Hill
$2,560 Pleasanton
$2,600 Oakland
$2,650 Alameda County
$2,640 Fremont
$2,670 Santa Cruz County
$2,740 San Jose
$2,780 Los Gatos
$2,790 Campbell
$2,810 Alameda
$2,860 Dublin
$2,900 Milpitas
$2,920 Santa Clara County
$2,930 Santa Clara
$2,980 Sunnyvale
$3,180 San Mateo
$3,420 Menlo Park
$3,420 South San Francisco
$3,490 San Mateo County
$3,500 Mountain View
$3,510 Belmont
$3,540 San Bruno
$3,550 Palo Alto
$3,550 Emeryville
$3,600 Cupertino
$3,730 Foster City
$3,750 Berkeley
$4,220 Redwood City
$4,730 San Francisco
Note, however, that for people who do not drive, the San Jose area is significantly worse for public transportation accessibility than San Francisco or Oakland.
I have friends who moved to Cupertino 2 years ago. He took a job at Apple that paid much more than here was making here on the east coast (though he had a 3 bd house here with a pool).
But, their rent for a 2 bedroom condo in CA is $4200 a month (extra fee for their dog). They know that they could probably find something less expensive but they chose the area for the schools. Their son will graduate high school next year and then they will look outside the area. It didn’t make any sort of sense to me but it was his dream job and they love the climate.
I knew it was expensive in SF, but not that expensive 
I remember my cousin telling me that it is also hard to find a place-- she’d see something newly advertised, go there straight from work, and there would already be multiple offers on it, every time. I don’t think people from elsewhere can understand. EVERYTHING is more expensive.
However, employers in San Francisco tend to be near the regional train lines, so that many people live in less expensive places while working in San Francisco. The 11 least expensive places listed in #25 are all along the train lines (BART).
True, but even the least expensive places on that list are high, IMO… these are 2 bedroom apartments we’re talking about here, and the prices shown are median! Paying that much for something you don’t even own seems crazy to me.
If it works for some people though, great. B-)
Aug 11, 2016
San Jose median home price is $1 million - Business Insider
This is a $6500-7000 mortgage plus high state income taxes (around 12-13%)
A family making $160,000/year barely qualifies for a home mortgage.
It’s difficult for many bay area families to convince schools in much less expensive areas of the country that they have financial need when their home is worth a million dollars (and that’s for a poorly made 1950’s tract home on a 5000 square foot lot) and they make over $100,000/year.
California income tax brackets go up to 13.3%, but few people get to that income level ($1,000,000 per year or higher).
The marginal rates start at 1% and go up to 9.3% for most people. Of course, one’s effective tax rate is lower than one’s marginal tax rate. See the estimator linked in post #0 of this thread.
https://www.tax-brackets.org/californiataxtable
Perhaps it is universal that people tend to overestimate the income taxes that they pay.
You haven’t included the various bonds and special assessments that most bay area taxpayers also pay. In addition, there are states that allow for more exemptions than CA does. While the rate may look higher on paper, after factoring in the exemptions, the total obligation is lower.
While not taxes per se, the rates for water and electricity are some of the highest, if not the highest, paid in the US.
So 9% state taxes for a family making $150,000 in CA:
Then-- 60,000/mortgage, 15,000 /health insurance, 30,000 ?federal taxes, 13,000 /state taxes, 12,000/ utilities etc., 12,000/ food…annually.
Leaving 8,000 for clothes, gas, household and auto maintenance…vacations???
College tuition expense—for the rich— and financial aid for the poor.
Most colleges net price calculators will average a net price for this “family” at 30-40,000/year.
Those insurance (assuming employer based) and utilities estimates seem high to me.
They are not…my gas and electric alone are running 600 mo plus I have to buy oil in winter.
Though heath/dental/life insurance is a bit high, unless self employed. Mine run about 700/mo employer based.
@doschicos, you do not want to know how high the cost of utilities is here. That $12,000 number is low for some of us. The California PUC tends to rubber stamp any increases the utilities seek and as a result the cost of electricity and gas is shocking. We pay more here than we did in the northeast where the temperatures easily dipped below freezing for four months out of the year and where a/c was required-far more than here- because of the levels of humidity we experienced.
The water companies are, at least in my area, for profit private companies and they have increased the cost of water from roughly $150/month in 2013 to well over $600/month in 2016 for the same or lower consumption. While some of this can be attributed to drought surcharges and penalties, we have been notified that the utility–which has posted record profits during the drought years- has filed for more than 6 permanent rate increases in the past year alone.
Insurance/ non-employer based 1230/mo family plan with a $4500 deductible per person -thank you Affordable Care Act
Utilities: gas and electric 250, cell phones (5) 275, water( CA “drought”) 150, cable and internet 175, close enough …
We are still tens of thousands of dollar off the schools expectation of how much a family can “afford”.
We used to pay close to $1,000 in our share of employer based health insurance per month, so that number is not unrealistic. Property tax, if you are a lucky owner, needs to be included, too.
Here is another twist to the megabucks - if part of this compensation includes stock compensation, watch out for taxes!
Lets say someone gets 1000 shares of restricted stock (RSU) as part of the compensation. Let’s assume the stock trades at $50 the day the shares are granted. The employee may not be able to sell the stock if there are insider trading restrictions in place, but comes the tax time, the employee has to pony up taxes on the $50,000 in compensation income. And that money has to come up from somewhere if the stock is not sellable. Nice problem to have, right? Not all are aware of the consequences and may be in for a rude awakening when their W2 shows an extra $50k of income - the income he cannot touch. Some employers withhold some tax from that windfall, but it may not be enough to cover the full tax liability at the end of the year.