City of Brotherly Love (and Low Prices)

I got wind of this Philadelphia Magazine blog post because my colleague Kevin Gillen is quoted in it as saying, “If you go out in Northern Liberties or Center City on a Friday or Saturday night, the bars and restaurants are packed. You’re thinking, ‘Where is the recession?’”  Indeed, for the demographic represented by the blog author and her friends, Philly is a great value compared to New York, DC, and Boston.

I am reminded of a colleague of mine who transitioned from investment banking in Manhattan to working for city government in Philadelphia, and was teased by his rich young former colleagues about the downward mobility, to which he responded, “I have a two-story apartment, and you have a closet; and you pay five times more than me.”  Or, as I like to say, New York may be bigger and better than Philadelphia, but is it five times better?

Just for kicks and giggles, I went to an online cost of living calculator and found that if I moved to San Jose, where I grew up and where my parents still live, I would need a 62 percent raise just to maintain the same standard of living.  Although that is a staggering number, it probably understates the difference; check out the splits by category (these are indexes such that 100 represents the national average, and Philadelphia is the first number and San Jose is the second number):

Overall  106         172

Food      128         112        

I shop at ghetto Pathmark in the hood, so my food bill is probably far lower than 28 percent more than the national average. 

Housing                68           322        

The real gap for me is probably even greater than the stated 373 percent difference (!), since I bought near the bottom here in Philadelphia, so we’re talking about a mortgage payment that has never even come close to four digits.

Utilities 132         140

Here I concede that the gap is actually probably in the other direction: since San Jose is so mild, I’m guessing I pay more for utilities here in Philadelphia than I would in San Jose, simply because I require more heating and cooling here.

Transportation  108         120

You know where I’m going with this.  Our family spends very little on transportation, since we walk and public everywhere. So the spread here is probably way bigger.  (Side note: it's not unusual for people to spend half of their household income on housing and transportation; for us, it's barely 10 percent.)

Health   108         119

Miscellaneous   121         103

I have nothing to add here.

Everybody’s different when it comes to personal finances.  Even among friends of mine who are similar to me in lifestyle and socio-economic class, there‘s likely to be huge divergences.  Just to cite one example, getting our kids by adoption was a lot more expensive than having them biologically, on the one hand, but they haven’t had any costly physical health issues, on the other hand.  And, of course, different people have different tastes, in terms of how much they choose to spend on vacations, clothing, and gadgets. 

All of that to say that when you live in Philadelphia, your dollar can go a lot farther, especially when compared to other high-cost areas where many of my friends and family members live, like Silicon Valley and Manhattan and Washington DC.  I’m not sure I would say it as flippantly as the blog subtitle (“Being young and employed in this city makes the recession seem not so bad”), but it is helpful to remember that life can be pretty good here in the City of Brotherly Love.