The Council for Community and Economic Research, an organization that publishes regional economic data, released figures this week showing that the 10 urban areas with the highest cost of living indices included three New York City boroughs, San Francisco, San Jose, Stamford, Conn., Washington, and Boston—all of which are represented among the cities with the highest shares of wealthy Americans. All of those cities have costs of living of 1.4 times the national average or higher, ranging up to the Manhattan borough of New York City, whose cost of living is more than twice the national average.
The fact that it's more expensive to live in a wealthy city sounds obvious. But there are important implications to that fact. Just as climbing the class or income ladder can be tough, so can moving into a wealthier city.
Frey says that people who settle in wealthier cities earlier in their careers have more time to build up equity in their homes. But getting in from outside can be difficult. "If you start your career in one of these low-income places, it's hard to make that jump. As people get older, a lot of their wealth is in the equity of their home," he says, making it hard to leave that home for a newer, more expensive place.
In addition, not everyone in Bridgeport, San Francisco, or Oxnard is in the top 5 percent, or even the top 50 percent. Moving up in the world, even within the confines of Boulder or Trenton, could require a much larger pay bump—and paying higher rent—than a similar move in Danville, be it in Illinois or Virginia.
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