Recently, there was an article on Yahoo! called “Where Have All the Good Jobs Gone?” which talked about a July 2012 report of the same name by the Center for Economic and Policy Research that compared today’s job market to that of 1979. The conclusion was that there are fewer “good jobs” today than back then. The definition that the CEPR used as a “good job” was a formula of wages, and employer-provided insurance benefits and retirement plans. The wage of a good job was determined to be set at $18.50 an hour - about $37,000 annually.
Nowhere in this report is there any indication as to how $37,000 could be a living wage when that conceivably could be about what you pay in rent for the year. Actually, according to a report by Prudential Real Estate, in 2Q 2012, the average rent on a Manhattan apartment was $3,778 per month – or roughly $45,000 a year.
So according to this math, having a “good” job in Manhattan would probably leave you homeless.
Granted, New York – and Manhattan especially – has price tags for most things that don’t relate to the rest of the country. Boston had the second highest average rent at $2,328 (merely $27,936 per year), so if you really want to live large after your rent is paid, move to Beantown, New Yorkers.
There seems to be a cultural economic marker of having a “six-figure job” means that you’ve made it. Well, that’s not necessarily the case. It might sound ridiculous, but in some of the larger markets in the country, that might mean that you need to religiously clip coupons, fastidiously tighten budgets and sometimes get a night job just to keep up.
Yet in other markets across the U.S., six figures would put you squarely in the reviled 1%.
A good part of this is because of the cost of living in different markets.
A recent article in Forbes magazine talked about adjusting wages in light of cost of living. The study cited ranked the area around Houston as its top “effective wage” market – their $59,838 average wage is, in effect, $66,933, when you adjust for cost of living. New York, on the other hand, toppled from fourth overall at $69,029 to an adjusted $44,605 - #41. Silicon Valley’s San Jose (et al) had the highest original wage at $92,556, when adjusted down to $61,581 it was still #2.
So for those of us who have a vested interest in accurately targeting demographics – either for commercial or perhaps political reasons – ignoring the geography of the concept of “upscale” might mean the difference in connecting with your consumer and alienating them.
Moreover, if this geographic distinction exists for those of the assumed “high incomes”, would it not then follow that the same dynamic holds for the financially vulnerable – and politically desirable - Middle Class?
Clearly, defining the financial outlook of individual families by one national number makes about as much sense as defining the nation based upon one individual market. For example, we know that “everyone” doesn’t watch TV on their laptops just because that’s what happens in certain Upper West Side apartments.
So for those of you who are planning media buys, be it product or political, remember just who is that upscale consumer that you think you’re getting. Sometimes, you might just find yourself actually talking to the Middle Class. And yes, it makes a difference.
However, it’s probably a pretty safe bet that whatever market you’re in, having a seven-figure job means that you can stop clipping coupons already.