08 February 2009

Running on Empty?

Allen Salkin throws down the gauntlet in the New York Times with this challenge: "You Try to Live On 500K in This Town."

Among the costs of being a banker living in New York, Salkin includes private school ($32,000 per child), a nanny ($45,000 per year), dresses for the little woman's charity balls (three at $35,000), vacation (two per year at a minimum of $8,000 each), car with armed driver ($125,000 per year), garage for that car ($700 a month).

Oh, and then for a "modest three-bedroom apartment," $8000 a month each for mortgage and maintenance. Salkin also details the various taxes paid by our benighted banker. Wait, private school PLUS a nanny? That would imply that both mom and dad are working, which means they're not trying to survive on just that measly $500,000 a year.

Well, let's see. In 2007, the median income in New York City was $48,631. ("Median" is not the average, but the number at which point half the people make more, and half the people make less.)

More than our banker pays his nanny. More than the folks who press the banker's shirts, alter his $1000 Brooks Brothers suits, shine his (overwhelmingly, as Nicholas Kristof points out, he's a he) shoes, run the cash registers where his wife buys $425 worth of groceries every ten days (what are they eating? how much are they throwing away?), and, presumably, though the article doesn't mention this cost, more than he pays the woman (again, a near demographic certainty) who cleans his house.

In 2009, this English professor is living in New York City on an income far below half a million, in fact well below six figures. I'm fortunate to make more than the median income, but after taxes, it's not that far above the median.

Public school: $1000 donation to the PTA. Nanny: none. Dresses for charity balls: yeah, right. Vacation: can I drive there? Car: $12,500. Driver: none. Garage: $248 per month. Babysitter: $10 an hour. My modest three-bedroom apartment in the neighborhood just memorialized by the musical "In The Heights" has a mortgage of $1283; the maintenance just went up to $1000.

Candace Bushnell explains why our banker needs all the status symbols his money buys:
So if you are in a culture where spending a lot of money is a sign of success, it’s like the same thing that goes back to high school peer pressure. It’s about fitting in.
Huh. And I thought the joy of getting out of high school was getting beyond all that peer pressure.

Update: The Dad, a retired mathematics professor, points out that "median" is a kind of average -- just not the kind we're used to thinking about, where you add up all the values and then divide by the number of values. Sorry, Dad.