The Cost of Living in the Bay Area

The Silicon Valley is known for two things: the tech and the prices. In an area where a one-bedroom apartment costs upwards of $3000 a month, industry and service workers (eg waiters, cashiers) can barely afford to pay rent. Chefs and waiters have to travel longer and farther to afford rent in one place and work in another. Restaurants are resorting to more creative ways to combat being short-staffed or to simply avoid hiring altogether. One example is the restaurant, Creator, an automated burger joint. Rather than teenagers flipping burgers, a robot does it.

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But high prices are affecting more than industrial workers. According to Mercury News the average salary for a "middle class" person living in the Bay Area is $192,000 a year. The median salary defines who is "Middle Class" and with high costs of living, the median salary is being driven up. Fremont, San Francisco, San Jose, Sunnyvale, and Oakland all rank in the top 10 fastest growing salaries for middle-class residents, according to the U.S. Census and GoBankingRates. The same salary that qualifies you as middle-class in the Bay Area is the threshold for being the top 5% of income earners in the United States. So while in comparison to the rest of the country you may be rich, the cost of living and in comparison to those around you, you are solidly in the middle, if not just exceeding the price of living. Tech companies can pay a generous salary, but you probably still won't be able to afford the median price of a home or condo -- ~1.3 million in San Francisco.

Despite the national definition of the middle class being those who make a median price of 60,000 a year,   a survey from February of 2018 shows some residents in Palo Alto, "considered themselves middle class with a household income of nearly $400,000" (SFgate.com).  To qualify for low-income housing, households have to earn below $117,400 in San Francisco, San Mateo, and Marin counties. For perspective, just a an hour and a half away in Hollister, the qualification is half, $50,280 a year.

Do you think definitions of middle class should be based on national or regional statistics? How do you think living in the Bay Area has influenced your perception of "rich" vs "poor"?


Sources
https://www.npr.org/2019/03/06/699126819/bay-areas-high-cost-of-living-squeezes-restaurant-workers-chefs-and-owners
https://www.mercurynews.com/2019/02/22/in-some-bay-area-cities-making-200000-a-year-means-youre-middle-class/
https://www.sfgate.com/bayarea/article/What-does-it-mean-to-be-middle-class-in-the-Bay-13011118.php
http://www.bayareaeconomy.org/the-cost-of-living-continues-to-rise-for-bay-area-residents/

Comments

  1. AnonymousMarch 19, 2019 at 9:05 PM

    After reading this article, I think these questions are very interesting to ask ourselves. This is because the Bay Area really is a unique pocket almost sanctioned off from the rest of the country. As a result, people who live in the Bay Area tend to have different perceptions and viewpoints, including those related to what stands as middle class. While I do think that the Bay Area is unique, I also think that it's an example of how regional statistics can be superior (over national) due to being able to be more specific. For example, although demand is not perfectly inelastic, it is somewhat similar just because houses are so high in demand, thus a change in price results in a relatively small change in demand. I also think that living in the Bay Area has clouded, rather than directly influenced, my perception of rich vs poor. This is because I only know what rich and poor are in the Bay Area, which are completely different to what those may resemble outside of here.
    https://www.sfchronicle.com/business/networth/article/Bay-Area-home-prices-climb-despite-jump-in-13435074.php
    https://www.sfgate.com/news/article/Signs-you-re-living-in-the-San-Francisco-bubble-8511530.php

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