The cost of living in New York City is exorbitant, and it isn't any less so in Boston. Workers in both cities are well compensated. The problem is this: housing is equally expensive. In this article, we will review some of the numbers of what it takes to live in New York City and Boston.
New York City
New York City is widely considered the business capital of the world and it has the price tag to match. An apartment in Manhattan will set you back as much as $4,200 per month, though bargains can be found in Marble Hill, Washington Heights and Inwood, where rents in the $1,700-$2,300 neighborhood are more common. No surprise, then, that the cost of living in Manhattan is the highest in the country—a whopping 154% higher than the national average. For lower rents, you'll have to look to the outer boroughs. Rents are slightly more affordable in Brooklyn at an average of $2,950 per month. In Queens, rents average $2,500 per month.
If you can afford to live in Manhattan, you are likely well compensated. Workers in Manhattan are among the highest paid in the country. They make $3,150 per week on average, compared with a national average of $1,180 per week. Those who work in the lucrative finance industry manage to pull down an average wage of $9,500 per week. Not bad if you can get it. Workers in Brooklyn and Queens earn significantly less: $1,100 and $950 per week on average, respectively.
What you pay for rent in Boston is no less alarming. An apartment runs $3,400 per month in Boston, and it's just as expensive in Cambridge at about $3,200 per month. Rents in the nearby cities of Worcester and Manchester, New Hampshire, are about $1,400 per month. However, the trade off is the one-hour commutes by car.
While New York is home to Wall Street, Boston is no slouch when it comes to homegrown financial companies. State Street (STT) and Fidelity Investments call beantown home, along with Liberty Mutual Insurance. General Electric (GE) is based in Boston. The area has birthed a number of technology and biotech start-ups, such as Moderna (MRNA), one of the many companies developing a vaccine for COVID-19. The annual mean wage for all occupations in the area is $69,000 annually. Chief executives (of which there are more than 6,500 in Boston) have a $223,600 annual mean wage. Financial managers have a $159,000 annual mean wage.
- Workers in Manhattan are the highest paid in the country, earning a weekly paycheck that is more than twice the national average.
- Not surprisingly, rents in Manhattan are high, costing $4,200 per month on average.
- Workers in the Boston area have a $69,000 annual mean wage.
- Families in both cities would need to earn nearly identical wages in order to make ends meet.
It is difficult to establish broad conclusions regarding the cost of living in New York City because the city's five boroughs have diverse characteristics and economic conditions. Similarly, the greater Boston metropolitan area includes a population that is far larger than Boston proper.
Data from the Massachusetts Institute of Technology suggests than what an average family needs to make ends meet is nearly identical in both cities. For example, in the Boston area, two adults with three children must earn at least $23.77 per hour each to support their family. The adults in this same family would need to earn at least $28.71 hourly in the New York area.
A single adult in New York would need to earn at least $16.74 hourly to make ends meet. In Boston, a single adult would need to earn $16.44 per hour to support themselves.
The cost of living in Manhattan is the highest in the country at 154% greater than the national average.
When economists or statisticians measure the cost of living in a given area, they are estimating the amount of money necessary to purchase enough goods and services to maintain a certain standard of living. To see it from a different angle, cost of living is a measurement of how much food, shelter, clothing, healthcare and education can be bought with one unit of money.
Cost of living averages are entirely quantitative, not qualitative; the nature of the goods or services provided do not come into consideration. It might be that one particular consumer good is 25% more expensive in New York City than in Boston, but you might not be able to see that the consumer good in New York City lasts 50% longer. Cost of living would report higher costs in New York City, yet in the long run, it would be just the opposite.