Interesting commentary on the Vegas economy (paging FlyerInHI)

[spdrun]

“He tells our students they need to learn that survival work will not grant them the economic security of white-collar careers. I never told him that I myself had such a job, that I needed our meeting to end within the next 10 minutes or I’d be late to a seven-hour shift serving drunk, needy tourists, worsening my premature back problem while getting hit on repeatedly.”
…
“About 60 percent of the college freshmen I teach will not finish their degree. They will turn 21 and then forgo a bachelor’s degree for the instant gratification of a cash-based income, whether parking cars in Vegas hotels, serving in high-end restaurants or dealing cards in the casinos.”
…
“In a city like Las Vegas, many customer-service jobs generate far more cash (with fewer work hours) than entry-level, office-dwelling, degree-requiring jobs.”

[FlyerInHi]

Interesting article. I think it’s the same for adjunct professors everywhere, unless they have independent sources of income.

For sure, not every college degree is equal in terms of generating income.

I would love the author to be my waitress. She probably speaks beautifully and is able to describe things very well.

[CA renter]

That’s a great article. Not sure it’s specific to Las Vegas, though. Seems that “survival workers” in Vegas are better off, in general, than workers in other cities and states (depends very much on the region, of course).

[spdrun]

Maybe, but part of the implication is that there aren’t enough non-survival jobs, so people get pushed to survival jobs that pay decently.

[FlyerInHi]

Cities like LA and NY have lot of service jobs in restaurants and hotels too. But rents are a lot higher, so for the same amount of pay, it’s harder to make it.

It’s not bad to be a service worker in Vegas. You can afford a $200k house that’s just as nice as a house $600k house in San Diego. Waitresses make about the same, in LA, NY or Vegas.

[spdrun]

As nice, but for the fact that it’s surrounded by a desert wasteland. That’s like saying you can buy a mansion in the ‘troit for $50k.

Difference is that NY and So Cal have a large % of jobs in other industries as well.

[FlyerInHi]

[quote=spdrun]As nice, but for the fact that it’s surrounded by a desert wasteland. That’s like saying you can buy a mansion in the ‘troit for $50k.
[/quote]

There’s no comparison, spd. The $50k mansion in Detroit is 100yo, old and run-down, surrounded by crime.

I’m comparing a new suburban development by Pardee/Lennar et al, in San Diego vs. Vegas. It’s almost like for like, except for location.

[FlyerInHi]

You should go to Vegas, spd. Some of neighborhoods are just as nice as much vaunted Carmel Valley (maybe the school district is not as good). Sure, it’s hot for 3 months out of year, but it’s preferable to cold, snow, and rain.

Property taxes are lower because values are lower. There’s no state income tax. For example, if you’re a work-at-home IT professional you could probably be based out of Vegas and save money. Over time, the tax savings would pay for the house. It’s like getting a “free” house. Not only are you getting a “free” house, but all else being equal, your nest-egg is bigger because you can safe the money you would otherwise spend on housing in NY, or CA.

To each his own, but if you like the run down old houses of NY/NJ, you can have them. If you’re a waitress, you can have a comfortable modern house in Vegas, or share an old musty house in New York with housemates. Your choice.

Who cares how diverse the economy is? You just care about your own income.

[spdrun]

If I wanted cheap and spacious, I’d sooner move to some small town in northern CA or on the Oregon Coast. A college town in PA or New England is another option. Or just buy a 2-bedroom apartment in SD for $200k.

Location matters a lot to me, and Vegas wasn’t my idea of a fun place to be when I visited.

[FlyerInHi]

Let’s look at an academic example.

San Diego:
– A $200k condo has about $2,400 year in property taxes. HOA of about $350/mo.
– State income taxes.

Las Vegas
– Same condo in Vegas is $75k (similar year, construction, interior amenities and comfort level) Property taxes of $800. HOA of $180.
– Zero state income taxes on your main job income, or investment income (as long as you don’t generate that income in a state with income taxes).

Assuming you’re making the same amount of money, compounded over time, you’ll be a lot richer in Vegas.

But if your aim is not to die richer, by having your bona fide residence in Vegas, you could probably afford a second 1-bedroom home in San Diego where you can stay part-time (maybe not in SD per say, but Temecula). The way I’m thinking is that the state tax savings pay for the condo in Vegas. So you can still afford a condo in Cali.

So, it depends on your priorities.

[FlyerInHi]

[quote=spdrun]
Location matters a lot to me, and Vegas wasn’t my idea of a fun place to be when I visited.[/quote]

People seem to either love or hate Vegas. There’s little in between. California transplants are miserable because they couldn’t make it in Cali. People from other parts of the country tend to love it, because it’s the “big city” compared to where they come from.

I know that location is important. There are intangibles that make a place more “liveable.” But I like to focus on objective measures. Take food for example. It’s just as good and diverse NY, but it’s not served in the same environment. There is no street life.

[spdrun]

But why not surround yourself with an environment that doesn’t make you want to beat your head against a wall most of the time? Vegas would do that to me, and being able to get out of prison for a month or two a year to go to a place that doesn’t suck is still not the answer.

[FlyerInHi]

It’s all in your mind. Don’t let people’s lifestyles upset you. I like to be around people different from me. Plus I can easily get away.

Vegas is a better financial decision for me. Cap rates are higher. I like to remodel and rent out my properties. I might hate it later. But right now it’s all exercise and entertainment for me.

If I were a waiter, for the same pay, I’d rather deal with the drunken tourists in Vegas than the demanding snobs in NY.

Waiters who manage their money well can become landlords in Vegas. Build a portfolio of a dozen properties that generate nice income in retirement. Hard to do in NY.

[spdrun]

Not hard to do in NJ right now that it has the highest foreclosure rate in the country… 🙂 Christie’s policy of non-interference hath its advantages.

[FlyerInHi]

In jersey you cannot own a 2/2 for $50 – $70k and pay if off then start investing your disposable income. Could even do mortgage at 3.5% down. easy to quality. 2/2 is probably more comfortable also.

Property taxes a high in jersey. Over a lifetime that easily equates to another investment property and cash flow that goes with it. Food in NY is expensive unless you shop in Chinatown. In Vegas you have Mexican markets overflowing with fresh produce within easy car drive.

State income taxes over a lifetime equate to another income property.

So the Vegas “survival worker” is up 2 properties generating higher cap rate ifor retirement. He can retire in Prague and enjoy more massages.

I think taxi drivers make more in Vegas than in NY. I read second highest after Hawaii.

[Author]

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