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| San Francisco: Where a six-figure salary is 'low income' | San Francisco: Where a six-figure salary is 'low income' |
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| A family getting by on $117,400 (£87,970) in one US city can now be considered 'low income', according to government figures. How can that be the case? | A family getting by on $117,400 (£87,970) in one US city can now be considered 'low income', according to government figures. How can that be the case? |
| That workers with six-figure salaries could be considered "poor" is something that might surprise many people. | That workers with six-figure salaries could be considered "poor" is something that might surprise many people. |
| But taking into account income and housing costs that is the reality for some families - who may be eligible for housing assistance - according to a recent report from the US Department of Housing and Urban Development. | But taking into account income and housing costs that is the reality for some families - who may be eligible for housing assistance - according to a recent report from the US Department of Housing and Urban Development. |
| In San Francisco and nearby San Mateo and Marin Counties it said $117,400 for a family of four was "low income", while $73,300 (£54,900) was "very low income" - the highest figures anywhere in the country. | In San Francisco and nearby San Mateo and Marin Counties it said $117,400 for a family of four was "low income", while $73,300 (£54,900) was "very low income" - the highest figures anywhere in the country. |
| A look at how earnings vary across the US and between jobs illustrates what is going in the city and the country as a whole - factors explored by a new study and interactive website by The Hamilton Project at the Brookings Institution. | A look at how earnings vary across the US and between jobs illustrates what is going in the city and the country as a whole - factors explored by a new study and interactive website by The Hamilton Project at the Brookings Institution. |
| Below the poverty line | Below the poverty line |
| Nearly two thirds of American families of four live on less than San Francisco's "low-income" threshold of $117,400. | Nearly two thirds of American families of four live on less than San Francisco's "low-income" threshold of $117,400. |
| Across the US, the median (middle) household income for a family of four is $91,000 (£68,170). For a family of any size, the figure is $59,000 (£44,180). (Median incomes are used throughout this piece). | Across the US, the median (middle) household income for a family of four is $91,000 (£68,170). For a family of any size, the figure is $59,000 (£44,180). (Median incomes are used throughout this piece). |
| And, in a country of 326m, more than 40m people in families of all sizes live below the poverty line, which is $25,100 (£18,800) for a family of four. | And, in a country of 326m, more than 40m people in families of all sizes live below the poverty line, which is $25,100 (£18,800) for a family of four. |
| Looking at all jobs, earnings are much higher in some large cities than they are in the rest of the country. | Looking at all jobs, earnings are much higher in some large cities than they are in the rest of the country. |
| San Francisco in particular stands out. | San Francisco in particular stands out. |
| The city has become a hub for IT and other high-tech industry - leading to an economic boom which has seen it become home to many of the country's highest-paid workers. | The city has become a hub for IT and other high-tech industry - leading to an economic boom which has seen it become home to many of the country's highest-paid workers. |
| Between 2008 and 2016, individual earnings for full-time workers aged 25 to 64 in the San Francisco metro area, which also includes Alameda and Contra Costa counties, grew by 26% - far faster than in many other large metro areas. By 2016, earnings had risen to $63,000 (£47,200) | Between 2008 and 2016, individual earnings for full-time workers aged 25 to 64 in the San Francisco metro area, which also includes Alameda and Contra Costa counties, grew by 26% - far faster than in many other large metro areas. By 2016, earnings had risen to $63,000 (£47,200) |
| Of course, there are other areas of the US with high wages. | Of course, there are other areas of the US with high wages. |
| Among 25 to 64-year-olds, typical earnings for full-time workers in recent years were $65,000 (£48,670) in San Jose, $60,600 (£45,400) in Washington DC and $55,700 (£41,700) in Boston. | Among 25 to 64-year-olds, typical earnings for full-time workers in recent years were $65,000 (£48,670) in San Jose, $60,600 (£45,400) in Washington DC and $55,700 (£41,700) in Boston. |
| In high-earning places like these there are many jobs that pay well. | In high-earning places like these there are many jobs that pay well. |
| In San Francisco, doctors - the highest-paid occupation - can expect to earn $193,400 (£144,800). The typical chief executive or public administrator is paid $167,300 (£125,260), while software developers can expect $117,100 (£87,670). | In San Francisco, doctors - the highest-paid occupation - can expect to earn $193,400 (£144,800). The typical chief executive or public administrator is paid $167,300 (£125,260), while software developers can expect $117,100 (£87,670). |
| But there are plenty of people earning much less. | But there are plenty of people earning much less. |
| The lowest-paid people in San Francisco are farm workers, who typically earn $18,500 (£13,850), while childcare workers earn $22,300 (£16,700). | The lowest-paid people in San Francisco are farm workers, who typically earn $18,500 (£13,850), while childcare workers earn $22,300 (£16,700). |
| Wages in other big US cities are noticeably lower. | Wages in other big US cities are noticeably lower. |
| In Detroit, for example, a doctor typically earns $144,300 (£108,000), while childcare workers receive only $15,000 (£11,230). | In Detroit, for example, a doctor typically earns $144,300 (£108,000), while childcare workers receive only $15,000 (£11,230). |
| However, the wide variation in earnings is only part of the equation. | However, the wide variation in earnings is only part of the equation. |
| Living costs, particularly for housing, play a significant role in determining how far workers can stretch their earnings. | Living costs, particularly for housing, play a significant role in determining how far workers can stretch their earnings. |
| In fact, living costs in general for the San Francisco area are 25% higher than the national average. | In fact, living costs in general for the San Francisco area are 25% higher than the national average. |
| However, as earnings are 45% higher than for the nation as a whole, many people in San Francisco are still coming out ahead. | However, as earnings are 45% higher than for the nation as a whole, many people in San Francisco are still coming out ahead. |
| More like this | More like this |
| It is when we look at housing costs specifically that the comparison is less favourable. | It is when we look at housing costs specifically that the comparison is less favourable. |
| In many large cities, the problems of high rents and home prices have been exacerbated by strict building rules and growing income inequality. | In many large cities, the problems of high rents and home prices have been exacerbated by strict building rules and growing income inequality. |
| It is high rents in San Francisco that are behind the decision to label some six-figure earning families as "low income". | It is high rents in San Francisco that are behind the decision to label some six-figure earning families as "low income". |
| For example, a fair market rent for a two-bedroom apartment in the San Francisco area is considered to be $3,121 (£2,340) per month - nearly twice the 2008 figure of $1,592 (£1,190). In Cincinnati, Ohio, the figure is $845 (£632). This difference (270%) is much larger than the difference in median family incomes (50%). | For example, a fair market rent for a two-bedroom apartment in the San Francisco area is considered to be $3,121 (£2,340) per month - nearly twice the 2008 figure of $1,592 (£1,190). In Cincinnati, Ohio, the figure is $845 (£632). This difference (270%) is much larger than the difference in median family incomes (50%). |
| As such, affordability is a significant challenge for many people in San Francisco. | As such, affordability is a significant challenge for many people in San Francisco. |
| Across the US, the government typically defines a low-income family as one that earns less than 80% of the median income for families of the same size, in the same area. | Across the US, the government typically defines a low-income family as one that earns less than 80% of the median income for families of the same size, in the same area. |
| But in places with unusually high housing costs the threshold can be higher. | But in places with unusually high housing costs the threshold can be higher. |
| In San Francisco, high rents have driven the government's "low income" threshold of $117,400 (£87,970) almost as high as the median income for a family of four in the area - $118,400 (£88,630). | In San Francisco, high rents have driven the government's "low income" threshold of $117,400 (£87,970) almost as high as the median income for a family of four in the area - $118,400 (£88,630). |
| While falling below this mark does not automatically entitle families to government housing assistance such as subsidies and public housing, it is a factor that is considered. | While falling below this mark does not automatically entitle families to government housing assistance such as subsidies and public housing, it is a factor that is considered. |
| More important than money | More important than money |
| But it is of course worth considering that, for many people, high prices are something that they are willing to put up with for a good quality of life. | But it is of course worth considering that, for many people, high prices are something that they are willing to put up with for a good quality of life. |
| San Francisco is certainly an expensive place to live, but good weather and a rich cultural life attract many residents. | San Francisco is certainly an expensive place to live, but good weather and a rich cultural life attract many residents. |
| Across the US, it is often the case that the places rated most highly for quality of life - like San Francisco and Santa Barbara in California and Honolulu in Hawaii - tend to have a high cost of living. | Across the US, it is often the case that the places rated most highly for quality of life - like San Francisco and Santa Barbara in California and Honolulu in Hawaii - tend to have a high cost of living. |
| While families with six-figure earnings may not be "low-income" in the broadest sense, the challenge remains for expensive cities across the US to find ways to offer a good quality of life to all of their residents. | While families with six-figure earnings may not be "low-income" in the broadest sense, the challenge remains for expensive cities across the US to find ways to offer a good quality of life to all of their residents. |
| A critical look at how to make more affordable housing available might be an obvious place to start. | A critical look at how to make more affordable housing available might be an obvious place to start. |
| About this piece | About this piece |
| This analysis piece was commissioned by the BBC from experts working for an outside organisation. | This analysis piece was commissioned by the BBC from experts working for an outside organisation. |
| Prof Jay Shambaugh is the director of The Hamilton Project and a senior fellow in Economic Studies at the Brookings Institution. | Prof Jay Shambaugh is the director of The Hamilton Project and a senior fellow in Economic Studies at the Brookings Institution. |
| Ryan Nunn is the policy director of The Hamilton Project and a fellow in Economic Studies at the Brookings Institution. | Ryan Nunn is the policy director of The Hamilton Project and a fellow in Economic Studies at the Brookings Institution. |
| The Brookings Institution is a not-for-profit public policy organisation, conducting research that leads to new ideas for solving problems facing society. | The Brookings Institution is a not-for-profit public policy organisation, conducting research that leads to new ideas for solving problems facing society. |
| Edited by Duncan Walker. |