Move to NJ, NY, or MD to be a 1 percenter

by iam1percent on May 14, 2012 · 10 comments

It looks like your best chances of upward mobility is to move to the northeast part of the US, according to a groundbreaking new study from the Economic Mobility Project at the Pew Center on the States.  Though the methodology was a bit complex, the long and short of it is that they looked at income changes of Americans in each state over a 10 year period.  Additionally, they looked at relative changes in income related to their peers.  They looked at this through an upward mobility scale of these Americans or the ability to climb 10 percentile points as it relates to their incomes.  They also looked at downward mobility of Americans or the drop in income over 10 percentile points. 

Using all three metrics together — absolute income gains, relative upward mobility and relative downward mobility — the researchers determined that New York, New Jersey and Maryland performed best in the country. They were, in fact, the only three states that outperformed the country as a whole on all three measures

Louisiana, Oklahoma and South Carolina were the only states that performed worse than the rest of the country on all three measures.

It was beyond the scope of the study to look at why the states performed the way they did, but the researchers do note come correlations specifically political affiliation, education, assets, and policy.  However, there was one factor that had a high correlation with upward mobility:  “the willingness to move to another state. People who moved to another state were more likely to get a big income increase, presumably because higher-income opportunities were part of the reason for migrating in the first place.”  This is what my wife and I did when we moved from Delaware to New Jersey.  We knew that our incomes would cap out in Delaware and that there was much more earning potential in New Jersey.  Enough earning potential to off-site the higher cost of living.  I also believe that another factor is the Wall Street / Washington D.C. physical continuum.  With such a high concentration of wealth in DC and NYC, it comes to no surprise that NJ, MD, and CT are all relatively wealthy states. 

This research is not to say that there isn’t upward mobility in other states or that its impossible to be a 1 percenter in Alabama, for example.  But the study does show that its a lot easier if you live in the northeastern part of the US.  We are lucky enough to have been born and brought up in the general area, so we didn’t have to sacrifice much to move.  I don’t know if we would have moved to this area if our families were not here.  Moving your family is a big decision and should not be purely a financial one.

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{ 10 comments… read them below or add one }

Noah May 14, 2012 at 2:42 pm

I suspect a large part of that is that those places are very expensive to live, thus the required higher wages. In order to maintain the same lifestyle, you have to make 2-3x the income as other states. If you live in OK or SC and make over $50K, you are able to buy a 4 bedroom, 3000 sq ft house whereas in NY, a comparable apartment is several million dollars.

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iam1percent May 14, 2012 at 2:46 pm

True, but its not apples to apples. Yes, NY City is expensive, but NY as a state compared to other states not as staggering of a difference. As I stated in the article, where i Live in NJ, the income increase and potential for growth far exceed the cost of living increase.

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Lance@MoneyLife&More May 14, 2012 at 6:03 pm

I agree that if you live near the major metro areas in these states you have the opportunity to make more. If Northern Virginia was a state it would be listed too, but the rest of Virginia more than offsets Northern Virginia. I enjoy living in my low cost of living town in Florida though.
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Call Me What You Want Even Heap May 15, 2012 at 7:55 am

I eventually plan to move to Altanta! Love the city, the people and cost of living is so much cheaper than Toronto. I can’t see myself moving any where colder than Toronto.
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Nick May 15, 2012 at 11:24 am

We’re in Hoboken, maybe moving to Westchester county depending on how work goes over the next couple of years. Definitely a lot of money around these parts…. Not yet 1%ers though, so I guess we’re in the right place.
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Shannon-ReadyForZero May 16, 2012 at 2:13 pm

I myself had to move from Ohio to New York and now San Francisco in order to have more career potential. As you mentioned, the higher earnings did offset the higher cost of living, but more importantly, moving has given me the opportunity to do work I genuinely enjoy. This is priceless. Now I’m just working on getting my parents to follow me :) .
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Shannon-ReadyForZero May 16, 2012 at 2:14 pm

I myself had to move from Ohio to New York and now San Francisco in order to have more career potential. Moving has given me the opportunity to do work I genuinely enjoy, which is hard to put a price on! Now I’m just working on getting my parents to follow me :) .
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javier May 17, 2012 at 1:25 am

Why limit yourself to the US richest area? I think you might have better opportunities in high growth economies like China, Brazil (as one of my college friends recently did), Peru (as one of my friends is considering), etc. And for STEM grads, won’t be California and even some parts of Texas better?

Anyway, I live in a low growth economy, been five hours from my parents and siblings is enough.

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Edward Antrobus May 18, 2012 at 8:19 pm

I would assume that NJ & NY do well because the financial sector, which is where most of the wealth in this country seems to be concentrated, is right there.

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Her Every Cent Counts June 2, 2012 at 5:27 am

Interesting. I left NJ, where I grew up, at 17 and, by chance, ended up in Silicon Valley. I strongly believe that my chances (despite still being slim) of becoming a 1% Club member are much higher in Silicon Valley than they ever were in New Jersey. In Silicon Valley, I’ve been able to secure a very early position with a startup and, despite not owning founder-level amounts of stock, I have enough which could skyrocket me to the 1% in the next 10 years should I hit the startup jackpot (more possible given growth of company now, but certainly not a sure bet.) I’ve often thought about moving back to NJ, as my family and friends are there, but ultimately I think my only shot at wealth is staying in Silicon Valley. Plus the weather is great. :)
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