Comfortable Income
Newcomer to a city, stay or not?
Abstract
The term " Involution" is one of the Internet buzzwords,?that have emerged in China in recent years to describe the phenomenon of young people today being caught in an irrational loop of internal competition, leading to a decline in the "return on effort." From students to working adults, excessive competition is everywhere at all times, creating mass exhaustion. How much effort does one need to put in, and how much reward does one need to get to live the life one wants? Firstly, this paper analyzes the?phenomenon of "Involution" from the perspective of urban economics. Secondly, the hypothetical model of the relationship between income and comfort is proposed to try to quantify the abstract concept of comfort; the third section?determines the urban revenue and expenditure index data. On this basis, the fourth section?will conduct mathematical modeling of the comfortable income?(CI)?baseline algorithm and show?the Python crawler program used in the urban consumption data used in this article; the fifth section?will take New York, Singapore, and Beijing as examples for calculation and comparison. In conclusion, CI baseline is a useful index to help people escape the cycle of involution and enjoy urban life.
Finally, I hope that if every city has a CI?baseline, people whose income exceeds the baseline can no longer be obsessed with making more money but slow down to appreciate the beauty of urban life.
Keywords:
Comfortable Income, Doughnut Economics, Involution, City Income/Expenditure
1.?Introduction:
When I first graduated and started my internship, my salary was about 1,500 yuan a month, not enough to make a living in Beijing, so my family had to cover 3,500 yuan a month for me. It was an uncomfortable experience. After years of hard work, today, my salary can support me to vacation twice a year abroad, so I stopped working and enjoyed a leisurely life. However, many of my friends of the same age, although they already have a high salary and much savings, always feel that they do not have enough money, so they continue to work hard. Compared to the remote villages with abundant resources - that can be self-sufficient locally, city life does require money everywhere. However, compared to the countryside, the city has unparalleled educational resources, job hunting, health care, and recreation advantages. People living in cities have fixed daily expenses - food, clothing, housing, and transportation; other expenses, such as regular insurance items - retirement, and medical care, also have fixed spending targets. Hence there should be a comfortable baseline for city life, as the income standard that most city governments want their citizens to reach. People who earn more than the baseline are free to enjoy city life, stop obsessing about the pursuit of monetary resources and slow down to discover the peace and comfort of city life.
There is another macro-level consideration in the context of this paper, namely the contemporary task of balancing economic development with ecological destruction. As the earth's resources are depleted, sustainable development has become a shared vision for every human being, organization, and government. Although research on renewable energy sources such as solar and wind power has made significant progress, the overall input cost is too high. The output efficiency is much lower than that of non-renewable resources such as oil and coal. The way for third countries to prosper is still the 'economic growth first and then environmental pollution control' model. Today's urban landscapes, which occupy 2% of the earth's surface, house more than 65% of the population, and this figure is increasing with the urbanization of each country. As the gathering place of human civilization, how cities continue to grow will be the key to reversing environmental degradation. Taking a further step, the life patterns of young people in cities will be the critic of the keys. "The world is inseparable from economics, but economics must change," British economist Kate Raworth criticized the core assumption of mainstream economics in the 20th century "rational economic man" in her book "(Raworth, 2017)." She believes that People are self-interested, have fixed preferences, and are calculating. People not only know what they want but also how to achieve them. Under such assumptions, traditional economics assumes that through market competition and price regulation, society can achieve the unity of individual and public interests. However, more and more research proves that the assumption of rational economic man cannot be relied on, especially the research of behavioral economics shows that irrational decision-making and cognitive bias of humans are widespread phenomena. In reality, people do not only pursue self-interest but know how to benefit each other; their preferences are not fixed but have fluid values; they are interdependent, not atom-like individuals, and so on.
In a certain sense, the current situation of environmental degradation is the result of the "internalization" of countries. One of the real solutions to stop the "predatory exploitation and waste of resources" is to reduce people's demand pattern for resources. Based on Kate's hypothesis of the "socially adapted person," we review the phenomenon of "Involution" among young people. When people are no longer worried about maintaining a healthy and good lifestyle, can the motivation of mutually beneficial behavior, guided by the value of ecological construction, make today's young people willingly stop to do something that will contribute to ecological sustainability? At least consider that companies consume more electricity when they work too late and it is better for everyone to go home early and rest.
In addition, urbanites are better educated and more ecologically aware than rural populations. Although there is poverty in the city, it is not the city that causes poverty but the city that attracts it. Whether young people are just entering urban society or migrant workers, cities provide relatively abundant employment opportunities and a safe living environment. They will not starve to death even if they do not have a job, so what is there to worry about? Are they afraid of becoming an alien in the collective or failing their family's expectations? Life is your own, and understanding this is the premise of this research.
2.?Hypothesis Model:?the relationship between comfort and income
‘You can’t do anything about the length of your life, but you can do something about its width and depth.’
- Ancient Wisdom
In recent years, there have been many reports on the ranking of the happiness index of global cities. Since the abstract sense of happiness can be quantified, so can the comfort of urban life. When counting happiness, investigators usually randomly distribute questionnaires containing some guiding information to citizens and ask citizens to fill them out, collect statistical scores, and rank them sequentially. The same method is also applicable to this study. However, instead of using large-scale field surveys to count people's subjective psychological feelings, this article starts from the perspective of the relationship between urban construction objective expenditure data and citizens' income. Generally speaking, the more funds invested in urban construction, the higher the maintenance costs of various urban facilities. Correspondingly, people living in cities need higher incomes to enjoy the convenience of urban life.
Figure to show the relationship between Income and comfortable.
However, the various facilities in the city are limited, and the time of the citizens is limited, the comfort of urban life will not increase indefinitely with the increase in income, so this paper puts forward the S-curve hypothesis. The interpretation is as follows:
The comfort of urban life is far from the relationship between the degree of freedom of choice and the degree of freedom of consumption. Just as the model assumed initial value, even people without income can enjoy the city lights and park benches for free. Safe and secure environment, likewise. Therefore, the initial comfort level of a city is also an interesting research object. The per capita proportion can be calculated by quantitatively studying the accessible public facilities assets provided by a city divided by the city's resident population(EDUARDO ENGEL, 2014). At the same time, this value can also be used as an index to measure the development of a city, which is far more realistic than the official document telling the citizens how much investment the government will introduce this year.
At the same time, this research pays more attention to the research on the urban payment part. Due to the inner city's uneven development, the city center's cost of living is higher than that in the outer areas, and the housing price in the school district is higher than that in the general community. People living in different regions have different needs. It seems impossible to calculate a universally applicable comfort income value. However, this confusion is an illusion. Employees who go to high-end law firms daily without parental support are likely to live in remote, cheap suburbs with meager wages. Assuming their comfortable income is affordable housing close to work to reduce commute time. Then, young people who live in the suburbs and go to and from factories may have the same idea, change to a higher-paying job, and have a home closer to the company. So no matter who they are and their background, the pursuit of comfortable city life is the same, and the expected salary income is similar. The civilization of urban life is to provide aspiring young people with a relatively fair, competitive place to live a comfortable urban life through their efforts.
3.?City Income/Expenditure Composition
For most people, working hard to earn money when they are young and raising their children and grandchildren when they are old is the standard for a happy and successful life. Nevertheless, in practice, there is no measure of the effort needed when you are young, and even if you do your best, such a life plan requires a significant component of good luck. Put aside tradition, and there is such a group of older people in the city; who still have agile thinking, no major health problems, with a monthly pension of three to five thousand dollars every day to visit the park, cook, practice, occasionally with grandchildren, but also have free money to say a trip, indeed the envy of the young people of today. Therefore, this article will use the life history of this group of older people to infer how young people should allocate their income to have the same kind of life in their old age.
First, if you want to receive a pension, you must pay pension insurance, which is a fixed monthly expense when you are young. Likewise, medical, vehicle, and homeowner's insurance are necessary expenses to avoid bankruptcy due to unforeseen events. In addition, young people entering society should have a clear life plan, including whether to buy a house. Do you want to change jobs? Should they fall in love and have children? Any generation of young people has pondered similar questions, but it is not advisable for today's youth to try to replicate precisely the life journey of previous generations. There are at least two reasons for this. One is that in China, the older generation experienced a planned economy, where the state assigned jobs and housing, while today, in a market economy, young people have to make their living; the second and the most significant proportion of the expenses of urban life housing. Today, China's housing prices are too high, especially in first-tier cities; even if your work hard to save money to afford the down payment on a home finally, you may have to pay back two or three decades to pay off the mortgage. Therefore, the first thing young people need to consider is whether they want to stay in the big city or experience a few years and go back to the countryside. After determining whether to stay in the city, than to consider whether you need to buy a house, more need to consider the career development plan and whether the current position development can meet the expected income. How long will it take to meet the expenses of city life and have a balance to prepare for other future life events, such as marriage and children?
领英推荐
As city life moves from primary, secondary, and tertiary industries to a diversified service economy, the career model of one job for life is a thing of the past. In addition to daily job income, cities offer many part-time jobs, such as driving hitchhikers after work and delivering on weekends. With the affirmative action movement for women, their value in the workplace is gradually being recognized. Women with higher education often choose to continue working after marriage and take care of their families by hiring nannies. The famous Filipino maid economy is the best example of this. For low-income traditional families who rely on male wages to support their families, paying a female head of household as a maid is an additional income that boosts the overall household income. It also facilitates higher-income families, thus creating a mutually beneficial business that allows buyers and sellers to live more comfortable and free lives.
In this paper, the income of urban living is divided into two types of income: FORMAL income and INFORMAL income, and the expense part, is divided into two categories: single and family, as shown in the table below.
4.?Baseline Calculation Methodology
In order to reflect the objective comfortable living standard of the city as much as possible, the comfortable income baseline can be calculated monthly. Monitor the corresponding expenditure data website through Python crawler technology，and collect with Google services. In daily life, people often use the 631 rule for retirement planning. That is, 60% is used for living expenses, 30% is used to purchase long-term financial products, and the remaining 10% is used for backup. Therefore,
Comfortable income = living expenses (Fixed + Flexible) / 60%
Regarding living expenses, urban housing often occupies a large number of expenses. Instead of collecting information on rental websites, this article starts from the perspective of house purchase. The reason is that the rental price is affected by multiple factors, such as housing quality, neighborhood environment, and commuting time. The proportion of false information on websites is high, and young people planning to settle in a city have potential housing needs. Urban residences dominated by multi-story apartments can often be used for more than 50 years of structural life. It is reasonable to buy a house at 30 years old and move to a nursing home at 80 after 50 years of living inside. In addition, this article is from the perspective of sustainable development. The ideal urban family structure is parents and two minor children, and the comfortable housing type is around?120 square meters with three bedrooms and one living room. Therefore,
Single housing expenses = total purchase price / 50 (year) / 12 (month)
Family housing expenses = total purchase price / 50 (year) / 12 (month)
PS: The water/electricity/gas/internet?grid is calculated separately
?
5.?Comparative analysis of CI values in?New York, Singapore and Beijing
Based on the research in section 4 and 5, through the Python crawler program and some website reference data, the comfort income of New York, Singapore, and Beijing is calculated respectively,
See the table below for details (data collection time is 2022-11-15):
The table data shows that the cost of living in New York is the highest, and the single group's monthly income needs to be over $5971.7 to maintain a comfortable life, followed by Singapore and Beijing relatively low. Based on this survey, the cost of living in New York and Singapore is different from the living cost website data (livingcost, 2022)?- "The cost of living in New York City is 46% more expensive than in Singapore City". This phenomenon is because the cost of living in Singapore has increased significantly in recent years. Among all the expenses, daily necessities in Beijing are relatively high, which may be related to the relationship between people in the collective culture, such as the amount of money that needs to be paid for attending weddings and funerals, and this expenditure tends to increase with the increase of income.
6.?Conclusion
The most significant difference between the Comfortable income baseline, as an index of a city economy, and other various economic indicators is the statistical method. In this paper, we presuppose a hypothetical model of comfortability. The primary purpose of this model is to show that the relationship between the comfortability of city life and economic income is a complex standard curve. Even a penniless homeless person can enjoy the benefits of the city's public facilities; There is no need for citizens to be anxious about career development, and they suffer from involution, especially in cities influenced by Keynesianism, the government pays for everything from education, health care, and retirement; In addition, all kinds of daily life, leisure, entertainment, and social activities in the city need money, but the consumption occasions that a city itself can provide and the time and energy of a citizen are limited. Therefore, every city should have a value that makes its citizens feel comfortable and comfortable, that is, CI baseline. In the chapter on City Income/Expenditure Composition, this article uses a single individual and "2+2" family as the smallest unit of urban life, with the source of income remaining the same and expenditures covering the cost of raising children. The total monthly expenditure is obtained by monitoring the price data of each consumer platform website, living data, and summing up. According to the commonly used 631 financial models, the total expenditure is divided by 0.6 to obtain a comfortable income baseline. Finally, the outcome is verified with New York, Singapore, and Beijing.
In comparison, the CI baseline is slightly lower?than the average income?(except Beijing)?published by the municipalities. Suppose we can determine how much each municipality spends on urban construction and management each year, subtracting the CI baseline and multiplying it by the number of citizens. In that case, it can be used as an indicator of urban affluence and a measure of how well the city is doing. More and more rural people are flocking to cities and towns because they offer relatively fair opportunities to compete and a relatively stable source of income. Urban development has been creditable in the business of escaping poverty. With a CI baseline, city managers could have a more compelling goal of getting more citizens to earn more than that baseline. As for individual citizens, when incomes exceed the CI, why should they involute? Why can't they give some opportunities to others and acquire respect?
References
EDUARDO ENGEL, R. D. F. (2014). The Economics of Public-Private Partnerships: CAMBRIDGE UNIVERSITY PRESS.
livingcost. (2022). New York City vs Singapore City - Cost of Living Comparison. Retrieved from https://livingcost.org/cost/new-york/singapore-city
Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st-century economist: Chelsea Green Publishing.