A plugged-in reader’s perspective on the local economics of medicine:
I wanted to comment on the economic decline and which groups are affected. Some sources talk about the medical field being unaffected, but this just isn’t true. I’m finishing my specialty training in 2 months, and I can tell you that all of the specialty fellows, GI, Cardiology, Nephrology, Pulmonary, etc. are having trouble finding jobs.
The graduating residents are running into the same thing. The larger employers, like the University of California system and Kaiser, have implemented hiring freezes in a lot of their departments. This applies to support staff as well (nurses, resp therapists, etc), not just MD’s. The smaller private groups seem to be doing the same, just not announced “official” freezes. A lot of the older docs are also not retiring to make up for all the money they’ve lost recently in their 401k’s. This increased physician “supply” is also dampening the overall salaries as well.
The relevancy to local real estate? Earnings, wealth and perception. Okay, and a chance to get our Case-Shiller discussion back on track.
∙ January S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]
∙ JustQuotes: FIFO Not LIFO For The San Francisco Economy? [SocketSite]
vietbro, sorry about your situation. My doctor is young and new to the practice and he has to work 7 days a week on top of it. I believe the current situation is only temporary, best of luck to you.
Dear VietBro: If you want to practice in San Francisco – forget it. There has not been decent MD jobs in The City for over 25 years. There are still great opportunities out there but you would have to be willing to move. The Mid-West and South-West, particularly Texas are constantly short of MD’s. In the greater Bay Area ( I am really stretching ), Solano County or part of East Contra Costa County may still have some openings depending on your specialty. Being a doctor hasn’t been appealing for a long time and yet silly folks still swarm to it. Income has been declining since the ’70s adjusted for inflation. Training is brutally long, malpractice is horrible and governmental bureaucracy is insane. I advised everyone I spoke with to avoid it unless one sees the altruistic side. Do the math, it doesn’t pay considering how far back you have to start. You don’t live long enough to make up those training years when you made $35K per… Most MD’s don’t make enough to qualify for decent housing in the better part of the Bay Area. That has been a fact for a very long time I hate to say.
When I was at a hedge fund, we hired someone who had been an anaesthesiologist. He said he couldn’t take the regulations and the cost/pricing squeeze. That was in the mid-90s.
Obviously, there are some people on here who really know this field well and/or are MDs (ex SF-er, Outsider, w2nest, etc.), but fwiw I think the risk/reward for a career in medicine in the US now is very poor. Health care is going to be nationalized, and the workers will just be GS-level cogs. Great, if you want to be a cog, I guess.
I bet there will be very good opportunities for the best/brightest/most enterprising to use the skills in other countries, though. Sort of like how the best and brightest used to be attracted to the US once upon a time 😉
My father is a surgeon in AZ and constantly complains about how miserable it’s getting.
I was actually thinking maybe about doing it and a career change but he’s so turned me off to it.
His practice is mostly medicare too (retirees) and he/all his colleagues sound absolutely miserable (and as LRMIM suggests) absolutely convinced that we will have a national health care plan.
What is it, 45 million people with no health insurance? They all can vote though!
It’s kind of funny, a few of his friends have stopped working and now day-trade for a living. Go figure.
BTW:
He also complains about how new surgical graduates (from places like harvard, yale, penn md schools) take like 6-8 hours to do a procedure that should be like an hour.
Also, competition from DOs is getting strong, I hear.
I think your happiness in medicine is 90% based on what specialty you choose. I rarely hear my surgical subspecialty collegues (orthopedics, ENT, ophthalmology, urology) or radiologists/dermatologists ever complain. Some work 40-50 hours/wk and easily make 300K/yr. No nights or weekends. Or you can cut back to less time and make 100-150K. I could also include some of the medical subspeciaties as well (GI, renal, cards) though their work load is higher.
On the other hand, in primary care, general surgery and peds, the pay has dropped off precipitously, and the training (general surgery, i mean) is only getting more grueling.
Sure the training takes awhile and costs alot, but when its over, you have a profession that contributes a lot to society, is unlikely (not impossible though) to be outsourced, actually is quite enjoyable when you take a moment and reflect, and is well respected.
I’ll echo some of what others have said.
SF has been a horrible place to practice medicine forever. it’s too high cost and too low revenue. Jobs there suck. which is why many docs leave, unless they are independently wealthy (spouse, family, etc) or just ‘have’ to live in SF. You definitely make a huge economic sacrifice to stay in SF (which is why I left).
I would never voluntarily move there for an MD job. depending on specialty, you’ll make 6 figures more outside of prime California. (here in the midwest, I make $100k/yr more than I made in CA, and I work less)
that said, nationally it is worsening everywhere. CMS re-figured the RVU system this year. it will slightly INCREASE the pay that primary care docs make, but drastically decrease pay for anybody who does procedures (basically, sepcialists)
This year Radiologists took about a 20% hit to pay. Surgeons took a 10-20% hit. interventional cardiology took 20+% hit. and so on. the more procedures you do=the bigger the pay cut.
around the country, MD jobs are more scarce lately because
1) revenue is down due to the way CMS has refigured the RVU system
2) uncertainty in the economy
3) hospitals WAY over-expanded during boom times (sound familiar?)
4) people are losing their insurance like crazy.
of course, we will for sure have nationalized medical care at some point in the future. our current system just doesn’t work. there will be GOOD things and BAD things about nationalization, but that is for another blog. but basically, just like many American things, we’ve overconsumed healthcare for some time now, and will have to retrench.
going forward (at least near term, 10 years or so) specialists will make much less, and primary care will make a little less. the gravy train of interventional cardiology is over (although still quite lucrative)
It would be nice if some of those pay cuts could be passed along to the consumer. But I’m sure they’re evaporating along the paper trail after about four or five stops.
Well, stick around, docs, the game isn’t over yet, and you may find the pay to be better than anything else the rest of us can find.
The CFO of Facebook just announced his resignation, which should tell you where ad-supported tech is heading.
And the biggest office tower in Boston just sold at auction for half of what it sold for three years ago, which should tell you where business in general is heading.
Those low doctor salaries may look pretty good by comparison in a couple of years!
I think your happiness in medicine is 90% based on what specialty you choose. I rarely hear my surgical subspecialty collegues (orthopedics, ENT, ophthalmology, urology) or radiologists/dermatologists ever complain. Some work 40-50 hours/wk and easily make 300K/yr. No nights or weekends. Or you can cut back to less time and make 100-150K. I could also include some of the medical subspeciaties as well (GI, renal, cards) though their work load is higher.
On the other hand, in primary care, general surgery and peds, the pay has dropped off precipitously, and the training (general surgery, i mean) is only getting more grueling.
Sure the training takes awhile and costs alot, but when its over, you have a profession that contributes a lot to society, is unlikely (not impossible though) to be outsourced, actually is quite enjoyable when you take a moment and reflect, and is well respected.
+1
but fwiw I think the risk/reward for a career in medicine in the US now is very poor. Health care is going to be nationalized, and the workers will just be GS-level cogs. Great, if you want to be a cog, I guess.
-1
btw, LMRIM, the mid 90’s were awful for anesthesiologists, now, quite the opposite…
the U.S. will almost certainly follow an incremental approach to ‘nationalized’ healthcare. certainly not the forum for this discussion, but, like our tax code, it will, IMHO, be a patchwork quilt – with all of the attendant loopholes, inequities, and inefficiencies.
a nice article on this topic (which is clearly OT)
http://www.newyorker.com/reporting/2009/01/26/090126fa_fact_gawande
those with skin in the game have a long while until income drops to GS level (which, by the way, is surprisingly high compared to the private sector in blue state metro areas, for subspecialist MDs…)
Outsider, VietBro: there are still good jobs for good candidates, yes, east of Tracy and North of SJC 🙂 Is it tougher here? No doubt. Especially now? No question.
“The CFO of Facebook just announced his resignation, which should tell you where ad-supported tech is heading”
Or it could be one guy leaving his job. In the case of facebook, I doubt it’s the ad revenue. Because anybody who has ever used Facebook for more than six months talks about how they’re always tinkering with it and making it much worse. Advertising by nature seeks a stable platform.
many docs i know practicing in the bay area make $350K to $500K / year – including my wife.
it’s not as lucrative profession as it once was but it certain beats many others.
people will complain about anything (even those earning at the 98th percentile of global wealth).
BTW: San Francisco is ranked #3 in terms of overall health for men, with Chicago being #1. We got #1 for life expectancy yay!
Seriously though, I am surprised we scored so highly.
http://www.foxnews.com/story/0,2933,511897,00.html?sPage=fnc/health/men
anon — is that $500k/year gross or net of malpractice and office expenses?
Just out of curiosity.
B/c my dad is an Ob-gyn and he ceased practicing in the US when the malpractice premium exceeded his gross income.
tipster, one CXO level leaving a company does not indicate the downfall of said company, or a sign that this particular CFO thinks that Facebook has a dim future.
There are so many reasons he could be leaving/asked to leave that the general public is not privy to.
It would be nice if some of those pay cuts could be passed along to the consumer. But I’m sure they’re evaporating along the paper trail after about four or five stops.
I’m sure you already know this, but MD salaries are a small fraction of healthcare costs. most of the money goes to the significant beaurocracy that is American health care (insurance companies, medical groups, CEO’s, big pharma, etc etc etc).
Some of these CEO’s make 250x what a doc makes.
many docs i know practicing in the bay area make $350K to $500K / year – including my wife
of course some do and some even make more (neurosurgeon can easily make $750k to $1M). But $350k to 500k/yr is clearly the salary of a specialist, like a general surgeon or high risk OB or cardiology. there are very few primary care docs who make that.
in the same way, there are some actors that make $5-20M per film. but most actors have second jobs to survive.
I stated this in the last thread, but the essential problem is that only 13.6% of SF HOUSEHOLDS make more than $200k.
SF is NOT the locus of wealth in the Bay Area (Marin, Santa Clara and San Mateo counties have higher % of high income people compared to SF)
http://www.demographia.com/db-sfbay$$.htm
I agree with ex-SFer on that, but San Francisco county has a 1) a lot of variance for a city (North of California vs. San Jose, etc.) and 2) a lot of people (yes again) living off entitlements.
That may skew the #s a bit. Just sayin’.
SF is probably a bad place for doctors because managed care is so entrenched here like Kaiser.
[Speaking just anecdotally, I think my dad (a colo-rectal surgeon) can make between 1-2M annually. i think the trick is volume though, he loads up on endoscopy]…seems like Obama’s health care plan is going to have phyisician-compensation means tested and not based on volume.]
But how many of those making $200K+ make their money in SF, and choose to live in cities for whatever reason.
Can you look that up?
jessep — you think, or you know, that your dad makes $1M+ as a doc? Is that gross or net? How many nurses, secretaries, billing clerks, offices, equipment etc. etc. does he have to pay for to support his practice?
b/c I have never met any doctors who earn even close to that much net of expenses … (not saying its impossible, just I’ve never heard of it).
But how many of those making $200K+ make their money in SF, and choose to live in cities for whatever reason. Can you look that up?
I don’t know how to.
but for the purpose of RE it doesn’t necessarily matter where you make your money, it’s where you decide to spend it.
thus, if people make lots of money in SF but choose to spend it in Marin, then that supports Marin RE, not SF RE.
clearly mcuh (most) of the money that Marinites have is made in SF or South Bay.
it is possible that perhaps SF has become a niche second home community to people who primarily live elsewhere, like Aspen Colorado… but I doubt it.
I think it’s still primarily a city of people who live in SF and work in SF or close environs.
over time you see a clear de-linking between income and housing prices in SF city proper. Some of that may be second homes and rich parents and trust fund babies and all that.
but much of it was clearly due to the explosion of “affordability” products (Alt A, Option ARMs, etc)
rationale: SF’s boom coincides with emergence/dominance of nontraditional financing… and the abrupt tightening of credit immediately impacted SF’s RE market… even before the credit crisis hit the upper income brackets.
That’s probably gross, but he does only have one assistant and one office, but works like a slave.
Keeps it lean and mean.
[He’s really a freak of nature in that regard: very very good at his hands, art, cooking, etc. but terrible at anything academic. Just blessed to have fell into something he was wired for.]
Regarding San Francisco’s “wealth”, I am reminded of friends from London who asked me while visiting ” we keep hearing from everyone in San Francisco about how wealthy this city is. Well, if it is so wealthy, why doesnt it look more wealthy?” So parts north of California are wealthy, has anyone ever been to wealthy areas of other cities?
With Candy Spelling listing her house for 150 million, one should remember that the real wealth in California is in the south in that large urban area we choose to pretend does not exist.
http://www.hiltonhyland.com/
aside from the N.E. quadrant of the city, there’s not much special about SF, and even within this area, there’s exist a lot of spots i’m embarrassed about when showing friends and family who are visiting and have lofty expectations about SF being vibrant and world class.
Small comment – Palo Alto and Cupertino are still going strong for SFH in the 1 – 1.5M range. Amazing what a *cough* decent school district can do for property values.
As for being a doc in the Bay Area, it’s no picnic. And with Obamacare coming down the line, we’ll be lucky if we get as good a care as Natasha Richardson received in Canada.
we get as good a care as Natasha Richardson received in Canada
This is ludicrous. Natasha Richardson initially denied to be sent to the hospital as she was lucid, didn’t feel in any kind of danger and this wasted more than 3 precious hours. But who could have known, right? Would you have made this call?
Look closer for a dysfunctional health system, much closer. You have millions of Joe 6-packs right here who do not have ANY form of health insurance and will eventually die an unknown but cheap death while the middle class spends precious time fighting red tape vs HMO/PPO penny pincher bureaucrats with no real medical knowledge. The system is broken, get real.
Get the facts straight and look at other systems that actually work like Germany or France (Britain and Canada are OK too, but not as good). And don’t listen to Hannity or O’Reilly who have their thumbs so far up their a$$es it created their trademark gargle when they spout their lies about the “socialist” systems. The very health care systems that are 1st in the WHO rankings when ours is beyond 30th in quality, costs, accessibility.
“one should remember that the real wealth in California is in the south in that large urban area we choose to pretend does not exist.”
Not really. As a matter of FACT, the numbers don’t really bear that out. Not by a long shot. Especially since the SF metro population is about 7 Million, whereas LA’s metro has about 18 Million. See compiled:
Metropolitan Areas where the Most Billionaires Live, 2009
New York Area 72
San Francisco Area 42
Los Angeles Area 35
Dallas Area 24
Chicago Area 18
Washington DC Area 12
Houston Area 9
Minneapolis Area 9
Boston Area 7
Denver Area 6
Detroit Area 5
Las Vegas Area 5
Seattle Area 5
Atlanta Area 4
Pittsburgh Area 4
Cleveland Area 3
Nashville Area 3
Phoenix Area 3
San Antonio Area 3
San Diego Area 3
http://www.forbes.com/2008/09/16/forbes-400-billionaires-lists-400list08_cx_mn_0917richamericans_land.html
…unless being a billionaire doesn’t qualify as “real wealth”. LOL!!!
I stated this in the last thread, but the essential problem is that only 13.6% of SF HOUSEHOLDS make more than $200k.
Is this true? It seems like an awfully low percentage. 2 mid-career working people can make that.
To the fellow, whom started this discussion,
I work alongside many clinicians, whom are very happy and have very nice homes in Marin, SF, or San Mateo. The reason for any discontent is the same reason for most of us: We love the Bay Area, but it is sure EXPENSIVE! Most employers, including Medicare do not adequately adjust for cost-of-living. Therefore, your colleague in Austin, TX or almost anywhere else in this country earns a similar salary, but can get so much more for it, from groceries to homes. Money does not go very far in the Bay Area, so you do not feel as wealthy, even when you make a significant salary.
All of my MD colleagues make min. net $200K, but typically $400-500K, but they all are specialists. They all are respected everyday that they go to work, and receive admiration from their patients and co-workers. There are not many careers, which cannot be off-shored, provide a reliable six-figure income, and is more well-respected than an MD. Actually, there probably are none!
“one should remember that the real wealth in California is in the south in that large urban area we choose to pretend does not exist.”
Yeah, but I bet the LA area would dwarf the Bay Area in the number of people with $10M+ per capita. I might be wrong about that. But I’m thinking the entertainment industry makes a lot of millionaires, not so much billionaires.
I am a Stanford doc. To answer someone’s question about what the University does if you’re “underwater” with your Stanford loan, Stanford does not eat the depreciation – the faculty member does. It’s pretty explicit in the contract terms.
To comment on the general topic, stories about Bay Area docs making incomes in the high 6 figures are greatly exaggerated. Those incomes do exist here, but they are the exception, not the rule. There is too much competition within most subspecialties around here, and a few established practices usually dominate the landscape. Just like in other lines of work, a lot of MD’s want to live here, and so each practice works harder or sees fewer patients, relatively speaking. Also, the biggest employers of MD’s in the Bay Area: Kaiser, Sutter, Stanford, and UCSF, are relatively modest in their physician pay.
Anecdotally, most docs I know (and I do know a lot) live in the Bay Area very modestly compared with our colleagues in other parts of the country. Relatively speaking, I feel like a blue-collar worker among all the HF managers, VCs, entrepreneurs, etc. around here. But, that’s the sacrifice we made to stay around here.
Most of those billionaires live in SF proper, too, in spite of ex-SFers claims that SF is not the “real” locus for Bay Area wealth.
There are more upper middle class people in the wealthier suburbs, but more really rich (and really poor) in San Francisco.
Palo Alto has six billionaires, Atherton has five, Marin County and San Mateo two each and Menlo Park one.
San Franciso has 17.
Chicago has 12, for comparison.
I love our status anxiety.
Okay, I forgot Atherton, which has four. Maybe ex-SFer has a point. In any case, there is quite a lot of really wealthy people here.
SF has a much higher proportion of MDs per capita than most of the country, which if supply and demand worked right, should drive down their salaries. It doesn’t work very well in Medicine, for various reasons, but it does mean that MDs have a hard time demanding a correspondingly higher wage because of the higher cost of living here.
You can speculate why so many MDs choose to live here, in spite of their lower proportionate wealth. I think it comes down to “quality of life” and also “great career opportunities” but am curious what others, especially in the field, think.
Who said SF wasn’t the playground of the trust-fund set?
2 Bechtels
2 Hearsts
1 Pritzker
1 Getty
5 Fishers
It will be interesting to see the 2009 version…
Quote – “I stated this in the last thread, but the essential problem is that only 13.6% of SF HOUSEHOLDS make more than $200k.”
I agree – In the early ’90’s I shared a four bedroom duplex apartment in the upper Haight. Our life style was definitely still post college slacker but we could honestly say our “household income” was over $200K.
The peninsula is pretty well represented (21) if you include Woodside (4), San Mateo (2), Portola Valley (1), Los Altos Hills (1), and Mountain View (1). Most of that has come in the last 40 years; since the rise of Silicon Valley.
Most of those billionaires live in SF proper, too, in spite of ex-SFers claims that SF is not the “real” locus for Bay Area wealth.
first, it wasn’t my claim, it was my interpretation of income distribution data for the Bay Area, which I sourced.
Second, perhaps your argument is valid if you restrict “wealthy” to billionaires. I was using >$200k/year data.
I would GUESS that the handful of billionaires (who make up 0.005% of the SF households) are less important to SF real estate valuations than the 13.6% of $200k/yr and up income earners. (presumably those in the sweet spot to buy in SF).
=====
as for docs salaries:
I agree with the doc named electrician:
To comment on the general topic, stories about Bay Area docs making incomes in the high 6 figures are greatly exaggerated.
it just isn’t my personal experience having trained/worked in SF that most docs make in the 300k+ range, although of course there are some (almost all specialists).
also, jessep: are you sure your father is a colorectal surgeon? he sounds more like a gastroenterologist if he’s doing all those colonoscopies/endoscopies.
it is not uncommon for gastroenterologists to make more money than colorectal surgeons for precisely the reason you state: GI does lots of little colonoscopies/endoscopies that are quick and pay a lot. colorectal surgeons are usually doing more time intensive surgeries that pay well, but lose out on volume.
I’ve never heard of a colorectal surgeon making $1M. most make $250-400k. but I have a GI friend who makes almost $1M… he does a procedrue that only 4 GI docs in the world know how to do. (most GI don’t make that much BTW, usually more like $300k again).
FWIW: as I said earlier though, CMS (medicare) is changing how reimbursement is done. starting last year they reduced reimbursement significantly for procedures. thus, the past path to wealth (do lots of quick procedures) is no longer as profitable, although still quite profitable.
my interventional cardiology and radiology friends saw a 15-20+% drop in income due to this.
lastly:
SF docs DO make less than many other places in the country, but it is masked by how they work.
where I work, I see 32 patient contact hours per week seeing about 24 patients a day and am on call maybe 1 week a quarter with up to 6 weeks vacation, and make a certain salary.
In SF, I would make a a just a little amount less, BUT I would have to work 36-40 patient contact hours per week and be on call more often and have maybe 4 weeks vacation.
the docs work MUCH harder out there for a little less than they’d make outside of SF.
ex-SFer, want me to give you his name?
I don’t know what you have or haven’t heard, but it’s certainly legit. He’s a private practitioner and even publishes on the side and teachers for surgeical tool companies.
Not only does he make 1M+, he makes it with mostly MEDICARE. He lives to work though.
I am trying to figure out how we consume so much medicine in the Bay Area. If our doctors are working longer hours and we have more MDs per capita, then we must be really large consumers of medicine.
The population isn’t even really that old either, and we are pretty healthy in general, so this is kind of strange.
no. I was just asking if you meant GI since most colorectal surgeons do more than just endoscopies/colonoscopies, and it was not uncommon these last few years for the GI specialists to make tons of money for the exact reason you stated.
I didn’t think you’d make the mistake since he’s your father, but sometimes people confuse colorectal vs GI, and psychology vs psychiatry, etc.
there are always people who are far out on the curve in all fields (like your father). there is no reason not to believe the examples.
for instance, Dr. Phil made $43 million. I totally believe it.
But most mental health docs don’t make that much.
“I am trying to figure out how we consume so much medicine in the Bay Area.”
I don’t know the precise statistics, but IMO there are a couple of factors. Because primary care is so poorly reimbursed, across the area there are not enough internists, pediatricians, and FP’s. I have many, many patients who can’t find a good PCP.
The “overpopulated” segments of medicine are subspecialists. As someone working in a teaching hospital, I see time and time again patients taken care of by private practice specialists who border on malpractice in that they will do every imaginable procedure on their patients, procedures that are not really indicated, for the money/reimbursement. It’s rampant here compared with my prior experience (Boston).
“Is this true? It seems like an awfully low percentage. 2 mid-career working people can make that.”
Depends on the career. 2007 median family income (meaning 2 blood-related or married people living together, different from household income) for San Francisco was $81,136. That’s entirely compatible with 13% making 200k+. Face it: not everyone in this city is rich.
http://factfinder.census.gov/
Electrician: I love your handle. Contemplating a career change ? I agree 100% with what you said. My brother is a physician and my sister is married to a current Stanford Medical School faculty and I have been in the business almost 30 years. All the numbers being thrown around apply to less than 10% of all physicians and they are indeed all specialists. The fact is, we forever been having too too many specialists and not enough primary care doctors and the reason is obvious. What Kaiser pays for a starting family physician or pediatrician is probably half of that for a starting specialist. There is simply NO incentive to do primary care. There are numerous on going plans and schemes to curtail specialist pay while bumping up primary care pay but the gap is still too wide. As we stand, a young primary care physician that has been in practice for a few years will not make enough to afford a SFH in San Francisco even if he or she owes nothing from the training days let alone paying for private schooling. All those MD’s in Marin, Pacific Heights are old-timers or physician couples. As I have stated in an earlier post, unless your altruistic urge is overwhelming, there are better profession around.
I have another anecdote:
My boss’s husband is an ophthalmologist. He had a thriving private practice in LA with celebrity patients. He sold his practice in LA to move to the Bay Area and marry my boss. Despite his success in LA, he claimed it was very difficult and competitive to start a new practice in San Francisco, so he joined an established practice that already had a couple of offices in the area. Long story short, the practice he joined recently cut all doctors’ salaries by 20%, ceased paying time off for holidays and vacations and laid off one of their techs. The optometrist in the group is scared he will be next on the chopping block.
As for my Father-in-law, the psychiatrist and professor at Stanford medical school: Stanford recently offered him early retirement. Not sure how many professors and other staff members were presented with this option.
How much does a starting Primary Care doc make? How about mid-career?
There is a similar situation going on with big-law attorneys in SF. Two firms (Heller and Thelen) disappeared. Nearly every big firm is doing layoffs. Now, the trend is cutting associate salaries (depreciation). While the profit numbers for partners haven’t come out yet, everyone is assuming the worst. Yet another high paid profession hurting during this depression.
Okay, I guess I can jump in as well. My husband is a physician and several of our close friends are physicians as well. My experience resonates with what electrician and ex-SFer have said. You can look up the salaries of doctors at UCSF/SF General because they are city/county employees. They will not be up in the $300-$500k range unless they are specialists and/or have a lot of private work supplementing their salary.
I think Kaiser pays more than UCSF/SF General for internists, psychiatrists, etc., but Kaiser doctors have to maintain huge caseloads. The advantage of working at SF General or Kaiser or the VA is that insurance paperwork is non-existent or minimal compared to a private practice.
“I am trying to figure out how we consume so much medicine in the Bay Area.”
Maybe we don’t. I had a sore throat and visited my Dr. He gave me a prescription for an antibiotic and swabed my throat for a culture. The culture is necessary because apparently the City of SF requires reporting of any oubreaks such as strep throat. I paid my $25.00 copay and $25.00 for Rx and that was it. Until I got the bill for the swab, my 20% was $125.00. So I spent $175.00 for a sore throat and I have insurance. If my deductible had not been met I would have had to pay another $250.00 on top of it. The doctor probably got another $25.00 from the insurance. Not sure what other “waste” there is in the system just so that some other beurocrat can say whethere there is strep throat going around. Granted, a noble cause, but an expensive one that misdirects funds, typical of SF though.
what a bunch of complainers! I dont feel sorry for any of the doctors. many of them do in fact make a “decent”salary…and can afford to own a home in SF or the Bay area. Did they enter medicine just to make a huge salary? if so, they shouldnt be in it then.
My partner and I, both licensed architects, make a decent but not obscene income. We own a house in NV…we dont complain about how it’s “so expensive” here. This is a great place to live and simply costs more to live here because it is pretty darn great.
Oh , one more thing: some of the doctors I have had as clients for remodeling have turned out to be the worst clients; wanting to cut my fees all the time, presuming to know everything about design, and complaining constantly about quality.
My favorite clients: middle class, working families with kids.
I am a surgeon and rent in Noe Valley – this blog and comments (particularly by LMRiM)have been very insightful for me and my family and we have truly appreciated this resource.
This discussion all comes down to how one defines quality of life – if square footage of one’s home is the yardstick (and that is how many from the midwest would define it) then obviously SF loses out. But many of us appreciate the uniqueness that this community has to offer and recruiting specialists to the bay area is usually not very difficult for a hospital. Many would rather live here and be middle class than wealthy in other areas of the country.
Primary care doctors have been hit hard, many new grads make about the same as RNs in Northern Ca and it may be hard to live in the real SF on a single primary care physician’s income. This is based on astronomical home prices over the past few years – maybe as this market corrects it will become more affordable.
NoeValleyJim suggests that we must be very high consumers of medicine here in the bay area since there are so many MDs and they work such long hours.
I think that a large number of MDs here no longer actively practice medicine – or never did in the first place. The bay area has a huge bio-med industry and on top of that there are major medical research facilities at both Stanford and UCSF.
noearch:
my goal wasn’t to complain about it being expensive in SF. it’s simply been to illustrate that the city became too expensive for most people to afford to purchase housing. to some extent that included even traditional high paying jobs like doctors.
I often hear people throw around $300-400k/year as though a lot of people make that kind of cash. The problem is that they don’t. not even most doctors. (although some clearly do, including many but not all of the specialists)
Most people make the needed sacrifices to scrape up the cash to pay the high cost of living in the city. I’m all for people making decisions for their own lives.
but we can’t have rational discussion about RE valuations when we have incorrect assumptions about income, unless the RE truly disconnects from income (which does happen, usually in vacation locales. I don’t believe it is the case in SF).
one of the incorrect assumptions I often hear is how many $200k dual income households there are in the city. It would appear that number is under 15%.
these same people who overestimate SF income are now overestimating MD income. Don’t you think it’s interesting that the 3 MDs on this thread argue against average SF MD compensation being in that $300-400k range? (while acknowledging that some specialists make that, and very few breach the $1M mark)
Get the facts straight and look at other systems that actually work like Germany
My eyes were really opened by the recent PBS Frontline documentary that showed different healthcare systems around the world. Striking doctors in Germany, who would have thought?
I know that my doctor’s practice (in the East Bay) has had a hard time retaining physicians. They recently joined the “evil empire” (a Sutter Health Medical Foundation) and now have computers in the patient exam rooms, and, it seems, more doctors and an NP on staff.
When I first moved to San Francisco over 14 years ago, I remember there was big concern over the fact that teachers, policemen, firefighters, etc. could not afford to live here, much less buy a house. And although that’s obviously still the case today, it’s interesting now to hear that many doctors and lawyers feel the same.
Bay Area GP $150-200K
Specialists $250-350K
Sub- eg. Neurosurgery, EP, IC, Pulmonology, $350-600k. Some can make 1mm+, only with experience and reputation. Only the exceptional few.
If you are banking more than $600k you have a very narrow focus private practice that is not dependent on insurance such as medicare, Kaiser or any other HMO. Most MD coming out of their residency are poorer that nurses on the floor. This usually lasts until their student loans are retired.
in general, xsfr, you’re right.
however, factoring in the second income of a spouse, it is often the case that physician households have total (married filing jointly) incomes of 300k+
the average primary care doc in the Bay Area, about 10 yrs into his/her practice, would be around 200k +/- 20% (W-2 income). working hours, and caseload, are certainly higher here compared to elsewhere (in general).
specialists 10 yrs into practice are usually >300k, but rarely higher than 500k, except in very specific fields.
does that make MDs poor? nope. Does it make their HHI routinely >250-300k? yup. compared to other areas of the country, is their standard of living lower here? yup. and are there lots of other people with similar or higher incomes? yup.
so in the Bay Area, physicians earn a very reasonable wage, working slightly to somewhat harder than their colleagues in other parts of the country, and, perhaps most importantly, are not as ‘high’ on the relative income scale here as they would be in other areas.
as in all things, it’s a trade-off. a surgeon with US training can make serious bank in certain foreign countries, but may have no interest in living in such a locale. by extension, the same holds for geographic preference amongst physicians within the borders of the US.
I agree with much of what has been said. A former Stanford medical student of mine, superbly trained in a surgical sub-specialty could not find a proper paying group in the Bay Area, and five years ago was forced to go to L.A., where he is doing well, but is surely not rich by Santa Monica standards.
A surgical resident, married to a psychiatrist, with one baby, wants to re-located from San Diego to SF. Even with a family money, he finds they cannot afford to do so, if they wish to live at their normal standard.
The Bay Area has always underpaid its doctors, compared to other metropolitan areas, especially considering the cost of living, which has always been very high. This is not new, and will likely not change.
However, many doctors do find a way, over the decades of their careers, to own in some of the best places, such as Marin, PacHts, Portola Valley, Hillsborough, San Mateo Park, and Palo Alto. But it almost always depends on investments or inheritance, not earned income.
I have to agree with Noearch – dealing with any higher-paid college educated professional in San Francisco is maddening. Very few of them treat people as equals – most treat everyone around them as annoyances to be dealt with and tolerated.
I also have to say that the GPs I’ve had in my 10 years here are, without fail, unfit to see the public. They are rude, short with you, condescending, and way too free with the offhand observations about your poor lifestyle. And that’s if they’ll even see you! A severe sore throat doesn’t announce itself ahead of time so you’ll have plenty of time to schedule an appointment 4-6 weeks from now. In fact, the best doctor I’ve ever had is the ‘viking’ ER doctor at Davies/Castro.
The problem with the GPs, mentioned by Eric, is due entirely to the HMOs here. If you are a private patient, paying yourself, you can choose a concierge practice, as they are unfortunately called, and receive superb individual attention from an internist or sub-specialist. The same is true in many other specialties, including psychiatry, where in the suburbs the best have no contracts with any HMO or discount PPO. (It is somewhat different in SF.)
Not too many people will go to a doctor that isn’t part of their PPO or HMO plan. Seems like a concierge practice will appeal to the wealthy or execs with nice perks.
Sorry I have to add a comment here – the problem with GPs in not due only to HMOs. It is due to the fact that reimbursement for primary care is low and in order to make a living if you accept insurance, whether in an HMO model or not, you have to see a higher volume of patients than in the past. This makes it harder for patients to feel that the quality of their care is good (if the doctor is rushing around seeing patients constantly).
Of course concierge practices are different in that regard. As a physician and surgeon, I do also take exception with the implication that “the best” would not take insurance. If the best is defined at making money, sure. But after seeing many different practice settings (academics, private, Kaiser, county) in medicine and certainly in surgery, as a patient paying more does not necessarily buy you a better product or a better clinician – although it may buy you more attention and better personal access to the doctor.
rich hypercondriacs support concierge practice, the rest of us are subject to the medical mills of HMO’s and PPO’s, with higher and higher deductibles and copayments.
polip:
I agree with most of what you say. I’d only disagree only with this line:
and are there lots of other people with similar or higher incomes? yup.
unless 13.4% of the population is “lots”. that may just be semantics.
======
again, the argument I keep hearing is “yeah, well if you have a doctor, and they marry another doctor, then they’ll make $300-400k and can afford a house”
and I agree totally. However, it is not as common as one would think.
regardless of WHAT the employment is, only 13.4% of San Francisco Households (which includes all dual income doctors) make above $200k per year
I just ask that people please note that these arguments are predicated on the hypothesis that the doctor is part of a dual income family with a spouse that makes similar amounts.
I am in exactly that position myself (dual income with high income spouse) so I know it can happen. but many MDs are not. I don’t know the percentages, does anybody have them?
-some MD’s are single
-some MD’s are married/partnered with stay at home spouse
-some MD’s are married/partnered with spouse who makes less
-some MD’s divorce
-some MD’s are dual incomed but one spouse must sacrifice income due to children.
(hard to have 2 physicians working 50-60 hour weeks when you have kids. it can easily be done with live in nannies and boarding school and all that. which leaves less cash for RE)
so again, I acknowledge and agree with all of you that
-doctors make a very good salary
-they are not poor
-they may or may not marry people who have even higher incomes
-some specialists make $300-500k (but very few make more than that)
there evidently WAS a study done on doctor-doctor marriages published by dear old people at UCSF nonetheless. unfortunately the data was published in 1999 using graduates from 1980-1990 so it is old.
http://statusofwomen.ucsf.edu/events/1999%20Sobecks%20et%20al%20When%20Doctors%20Marry%20Doctors.pdf
however, the results:
22% of male physicians were married to women physicians
44% of female physicians were married to male physicians
26% overall physicians were married to another physician
(numbers differ due to different numbers of male/female physicians).
MD2s are physicians married to other physicians.
MD1s are physicians not married to other physicians
Overall:
-male and female MD2s make less money on average than male and female MD1s
-female MD2s work less hours than female MD1s, but male MD2s work same hours as male MD1s
also: interestingly, other data indicate that certain specialties have higher divorce rates than others. with psychiatry (51%) and surgery (33%) higher than internal medicine (24%) and pediatrics (22%).
http://www.hopkinsmedicine.org/press/1997/MARCH/199703.HTM
so looks like marying another doc might not be the path to the $400k/year salary that people assume.
NVMatt is right, in that money does not necessarily get you a better result, but it does get what most people also want, personal attention and time.
The example of Harley Street, London, proves that even in a thoroughly nationalized health service, in a country that truly believes in it, there will always be people who want and can afford more.
When I wrote HMOs, I meant to imply that the MDs who sign contracts know that they are being reimbursed at sometimes derisory sums. So they sometimes seems to be short and uncaring, when in fact they may be more altruistic that purely private MDs. Still most patients judge their doctors largely on the social aspect of the interaction. It is a true dilemma.
By the way, there are a lot of people, perhaps a third, who still seem to be willing to pay beyond their HMO or insurance company’s “usual and customary fee” which means, for those who do not know, the usual and customary amount that the HMO wants to pay, not the fees customarily charged.
one of the incorrect assumptions I often hear is how many $200k dual income households there are in the city. It would appear that number is under 15%.
Ex-SF-er, What percentage of the properties in the city actually change hands each year? Especially considering the effects of prop 13 and the fact that 60% of households rent, I think it’s entirely likely that the VAST majority of those actually buying in SF are in that 15%, even though that seems like a very small number.
How does having 17 billionaires justify the high cost of housing? There are over 30 billionaires who have vacation homes in two clubs in the Palm Desert area (Bighorn and The Vintage Club), yet there are still homes and condos available outside the club gates for less than 350K. (See Forbes article “Sorry You Can’t Join” regarding the Vintage) Just because you live a mile away from a billionaire does not make your SOMA shoebox condo more valuable. I hate to break it to some of you, but those 17 people have more than just a home in S.F., and spend a LOT of time outside “the city”. Do you really think one of the list of 17 is shopping for their dream home in Bernal or Noe Valley?
Nobody made the logical leap that you’re implying, Notoneof17. Somebody came with an out of the blue “LA has more rich people, actually, look at Candy Spelling’s house.” It was responded to in kind, because LA versus SF is a favorite topic on many a blog.
I thought the ususal war was Chicago vs. SF ;).
If Larry Ellison has homes in Malibu and Beverly Hills, which city should he be counted with? My point was that Palm Desert could claim to be one of the richest cities in the world per capita (as well as Indian Wells and perhaps Rancho Mirage).
My crazy theory is that the high cost of housing is not so much created by our regional wealth alone, but also by Geography (water & hills), rent control, Prop. 13, Nimby no growth, AND the recent speculative bubble.
Just because I can walk my dog down outer Broadway does not mean that I live in the same world as Gordon Getty.
Why do docs get paid less here than other places? It’s pretty simple — there is an overabundance of doctors who want to live in the Bay Area relative to other areas.
Adding to this supply are graduating classes from two very good medical schools here (UCSF and Stanford) that consist of people who don’t want to leave, either. So, there’s a steady stream of new grads dying to stay here that would even put up with the crappy working conditions at some of the lesser Kaiser facilities just so they can be here.
There’s a reason why docs can get paid more working in, say, Fresno. Supply and demand.
Nobody made the logical leap that you’re implying, Notoneof17.
that’s not quite true. they initially also used the 17 billionaires to counteract the data that shows that SF does NOT have a proportionally higher percentage of >$200k+ earners. Marin, Santa Clara, and San Mateo do, and thus would seem to be where the wealth tends to migrate.
Why do docs get paid less here than other places? It’s pretty simple — there is an overabundance of doctors who want to live in the Bay Area relative to other areas.
this is true. The second reason is the high COL. a doc takes home salary AFTER all business expenses are paid. expenses are very high in SF.
renting/buying clinic space takes away profits. you need to pay nurses, techs, secretaries, etc all more, again eating profits. Medical malpractice is high. and so on. you do get reimbursed more per patient (RVU) in SF vs Austin TX as example, but it’s not quite enough to make up for expenses.
high COL makes businesses less competitive. as example, I’ve spoken before about an acquaintance of mine who is trying to get Wells Fargo to relocate headquarters back to Minneapolis, due to lower cost structure. Before you give arguments about how Wells can only be run from SF, please understand that Norwest became one of the biggest banks in the world from Mpls and still runs a large part of their operations there, and USBank is also very big and Mpls based. Norwest became big enough that it bought Wells Fargo (but took the Wells name). And BofA is based out of Charlotte.
ex-SFer, does Illinois have medical malpractice limits?
I think Cali does at 250k for punitive awards.
Another thing: I’m not sure “hqing” for banks is all that costly and important really…Keep in mind, that NorWest actualy bought Wells Fargo and moved TO SF, not the other way around. That doesn’t mean it can’t leave of course. But if that were such a big motivativing factor, I don’t see why they aren’t already gone.
Bank of America is run out of Charlotte that’s true, but they still run a large part of their operations from SF.
Furthermore, I quarrel with this idea that you can make more in SF as a doc than Austin..that may certainly be true in a big group or clinic, but private practitioners can make way more in more rural areas/retirement areas than here.
Actually I’d be more worried about IShares/BGI leaving than Wells from my understanding. Wells seems a little more entrenched in California than them.
Furthermore, I quarrel with this idea that you can make more in SF as a doc than Austin..that may certainly be true in a big group or clinic, but private practitioners can make way more in more rural areas/retirement areas than here.
sorry, my point must not have been clear leading to a misunderstanding. reimbursement per patient is higher in SF than in Austin. however costs are much much higher in SF than in Austin.
doctors are paid after all expenses. thus, even though they can bill more in SF compared to Austin, they still fall behind due to the increased costs.
docs are paid based on “relative value unit” or RVU. each thing a doc does earns a specific number of RVUs, and then is compensated based on this.
AN OVERLY SIMPLIFIED EXAMPLE USING COMPLETELY MADE UP NUMBERS (which gives you the basic understanding of how physician compensation works even though it isn’t completely correct but it would be pages and pages to describe how it really works)
Let’s pretend that a routine physical is worth 1 RVU, and a colonoscopy 5 RVUs and a heart transplant 15 RVUs…
so if you do a physical and a colonoscopy and a heart transplant one day, you would get 21 RVUs for the day.
So a SF doc would get 21 RVU’s and an Austin doc also gets 21 RVU’s.
Each RVU is worth $45.
SF gets an adjustment of 1.2
Austin gets an adjustment of 0.9
So a SF doc would get 21 RVU (x) $45/RVU (x) 1.2 = $1134 for the day
an Austin doc would get 21 RVU (x) $45/RVU (x) 0.9 = $850.5 for the day.
So the SF doc brings in more revenue.
However, the costs in SF are much higher. perhaps the daily costs faced by the SF doc are $434/day. after all that is paid, the doc receives $700 for his/her work
In Austin costs might only be $100. so the Austin doc gets $750.5/day.
so the SF doc gets more revenue per patient, but their costs overwhelm that so they make less income.
==================
As a side note,
in the past, procedures were valued higher than “thinking” no matter how easy the procedure or how hard the “thinking”
so a doc would make more doing a Flex Sig (that takes like 10 minutes) compared to doing a complicated physical (that might take 30-60 minutes).
so it really caused people to want to do lots of procedures (like wart removal) over more thinking things (like cancer).
CMS changed that last year.
So last year it may have looked like this
circumcision: 3 RVU
physical: 1.2 RVU
this year it looks like this
Circumcision 2 RVU
physical: 1.4 RVU.
this is why the specialists took a big pay cut last year (up to 25%) AND will take another big pay cut in the next 2-3 years.
(CMS revalues and redoes the rules every 3 years).
CMS is the big dog. once they do something almost every private insurer follows similarly, though not exactly.
if you’re really interested in this stuff, go here
http://www.cms.hhs.gov/PhysicianFeeSched/
Jessep,
Got any insight on that? Are you in their line of business?
SFS, my neighbor is an md at Ishares, besides what he tells me just hearsay.
I don’t work in the development of ETFs, etc.
Cool. I know they have a big presence in the FD, crowding my coffee places in the morning. Not so much since the latest Peet’s addition on Market though…
actually, I agree that it’s unlikely that Wells will shift headquarters any time soon…
I’m just bringing up the fact that high cost is difficult on businesses and puts pressure on everybody… employers, employees, shareholders, etc.
if there’s too much pressure it starts to cause dislocations/relocations.
from financial standpoint, the real risk to SF is that SF is not the center of global finance. obviously it’s NYC (and surrounding hedgie land) and to a much lesser extent Chicago.
if further retrenchment occurs it is likely that the financial firms will axe the auxiliary units and retrench to home base.
as for west coast presence, I’m not sure if SF or LA is more important to finance. anybody know?
LA, for sure, ex SF-er. There is really very little in SF, other than VC, two important equity-focused mutual fund groups (Franklin and Dodge & Cox) and a very small private equity/hedge fund presence. LA has a very large “footprint” in the credit world (which is an order of magnitude larger than the equity world), ironically somewhat a legacy of Milken’s Drexel days.
I should say that when I say “very small” in relation to SF’s presence in the hedge fund/pe world I’m of course talking relative to places like NYC, Greenwich, London, Geneva, LA or Boston. It’s bigger than almost anywhere else in the US of course (not so sure these days about all that is going on overseas except in London and Geneva).
LRMiM,
It’s sort of amusing that D&C closed a few funds before this crisis hit, surprise surprise! they’re all open again…
they made some big boo-boos for sure.
LMRiM,
I asked you this before, but what (or who) do you like at Franklin?
sparky-b,
I don’t really have any view on the specific funds that Franklin runs b/c I don’t really do retail mutual funds. I used to be pretty friendly with their head of fized income, Chris Molumphy, and he seemed a reasonable guy, but again I don’t really have a view on individual funds. They are certainly a marketing powerhouse!
A while ago I mentioned that Franklin had been one of the very best performing common stocks (symbol BEN) over the long term (for a while I think it was the highest returning stock over the past 20 years, but I don’t have the data handy anymore, so that might not be true anymore). But an investment in Franklin is definitely not the same as an investment with Franklin I’d imagine 😉
That’s what I figured, but I thought I would ask since I was going to put some money in there and I get the family deal.
It’s sort of amusing that D&C closed a few funds before this crisis hit, surprise surprise! they’re all open again…
It is, jessep. The mutual fund guys don’t have the formula down. The hedge fund guys are much smarter. They don’t close their funds before the crisis hits – they simply close the fund down after they’ve blown up the clients’ money. Retreat to their yachts and mansions for a year or so, and then reopen a new fund with a new round of suckers. That way, they avoid having to re-attain their high water mark, and can start earning incentive fees again immediately! Soros did it in ’98, Druckenmiller, LTCM (the principals all went on to open new funds), Niederhoffer (he blew up twice!), etc. etc.
BTW, what sort of investment business do you have an interest in? I’d guess it’s a wealth management sort of place for HNW individuals/families? There is a reasonable presence of those sorts of shops out here as well (not surprising given the amount of concentrated wealth around).
The reason primary care folks make less is because their careers have evolved into high level triage care.
First, they check their lists to make sure patients have received the proper care from other specialists: colonoscopy after age 50, mammograms, PSA testing, etc
Next, if the patient comes in with a real complaint, referrals are made: Feet –> Podiatry, Palpitations —> Cards, Blurred Vision –> Ophthalmology, etc.
The reason Nurse Practitioners and Nurse MDs are taking over primary care is that it is no longer the “thinking” field it once was. The physical exam has been flattened by radiology and malpractice.
that’s not quite true. they initially also used the 17 billionaires to counteract the data that shows that SF does NOT have a proportionally higher percentage of >$200k+ earners. Marin, Santa Clara, and San Mateo do, and thus would seem to be where the wealth tends to migrate.
“They” (me in this case) made the point that SF has a proportionally higher percentage of Billionaires than the surrounding area. I don’t have any data, but I am guessing that this is true for $100 Millionaires and double digit millionaires as well. I see that about 20% of San Francisco County residents are millionaires (not including the value of their home), at least according to what I could dig up, but I haven’t been able to find data for the surrounding counties. Does anyone have this?
I love our status anxiety.
I love how a calmly reasoned discussion about data turns into an emotional drama in some poster’s mind. Look in the mirror buddy.
“20% of San Francisco County residents are millionaires (not including the value of their home)”
PLEASE provide this source. I would find this VERY interesting, and encouraging. Are you sure you are not confused with Newport Beach or Santa Barbara?
http://findarticles.com/p/articles/mi_m0EIN/is_2006_Oct_5/ai_n27046225/
“San Francisco County has 75,371 millionaire households”
http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty.htm
Total households: 329,700
Do the math yourself. It does seem a bit high, but not unreasonable at all, as numerous sources have Santa Clara County as 17%+ Millionaire households.
hmmmmmm, using your linked article, that would mean that 20% of Los Angeles County are millionaire households as well. I guess San Francisco is not as unique as it thinks it is?
LA County has a lot more than 1.3M households. Please show your math 🙂
There is just no way that is right. A summer 2008 article in the chron stated there were about 1/7 this number — about 1 in 30 households. A reliable source would be nice.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/25/BU1611EF3L.DTL
The point is not about uniqueness it’s about who can afford housing;
75,371 millionaires
115,315 owner occupied houses
54,435 of those have mortgages.
Nice try, NVJ. Shame that first article is nearly 3 years old at this point.
But I bet anyone who overpaid for real estate in the last few years considered themselves a millionaire: bought an overpriced condo for $850K in ’05, and real estate usually goes up by 15% a year, so with that and my Land Rover, I’m almost a millionaire! Woo-hoo!
Nevermind netting the debt, since these BS surveys are usually based off of ASSETS, not NET WORTH. So any clown that bought a million dollar condo with 5% down and an option ARM was technically a millionaire for about 6 months. Hope they enjoyed it.
Anyway, here’s a slightly less outdated article from the Chronicle which shows 11,391 millionaire households in SF. Again, this is by assets, not net worth, so it doesn’t mean that much.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/25/BU1611EF3L.DTL
As of last summer, 11,391 households in the city had over a million in assets. If your total household number is accurate, that’s about 3.5% of the city. And I’m not even taking into account that homes are usually people’s biggest asset, and they’ve fallen in value since last summer. So has just about any other investment they might have had. So today, probably a lot less than 3.5%. And falling.
NVJ,
I haven’t seen the study saying “excluding RE”. Being a virtual RE millionaire is very different than having 1M in the bank and by far!
If everyone with 1M liquidity withdraws 1M from the bank in SF, they’ll have 1M in their pockets (provided the banks don’t tank).
If every homeowner with 1M equity sells at once, well, the last sellers will have probably enough for a year at a Motel 6.
Is Claritas a more reliable source than TNS Financial Services? I honestly have no idea.
Lots of places list the numbers from the TNS Financial Services Affluent Market Research Program, but I don’t know anything about their methodology.
If it’s in the chron, my gut is to distrust it! Nevertheless, 1 in 5 just seems impossible. And the chron numbers do seem to indicate that SF is no poorer or wealthier than the rest of the Bay Area.
At least the Claritas research does state “$1 million or more in financial assets”.
“Is Claritas a more reliable source than TNS Financial Services? I honestly have no idea.”
How about a common sense check, then. Do you honestly believe that over 20% of this city’s residents have a million dollars in assets? Do you have that much? Do 20% of your friends and coworkers?
Go take a walk through any neighborhood in the city, look around you, and consider if that seems realistic.
I’ve never understood the predilection that San Franciscans have for pretending our city is far richer than it really is.
You do know the difference between Household wealth and individual wealth, right? Saying that 20% of households have +$1M is a very different thing than saying that 20% of individuals do.
I wouldn’t be one bit surprised to discover that 10% of our residents have over $1M in assets. Probably 10% of the people I know well enough to really have a clue about their financial situation do.
Well, the survey includes only financial assets, not real estate assets or equity. So again, I highly doubt that 20% of households have over a mil in financial assets give the general markets today are about 30% down from 6/08. And if you do add in real estate equity (or lack thereof), I’d wager the picture is even bleaker.
But I can’t argue too much, because all of my friends are millionaires, too. You know – because we’re all so rich here. See you all at the regatta!
“I’ve never understood the predilection that San Franciscans have for pretending our city is far richer than it really is.”
That is what is so obnoxious about San Francisco. For a city that should be so “liberal”, I am amazed at how many will want to convince you the city is special because it is wealthy. As an architect who works for a firm who creates homes in neighborhoods such as Newport Beach, Laguna Beach, Napa Valley and Pebble Beach, I have never had the experience of those clients wanting to inform me of how “wealthy” their cities were. (Maybe because they did not have to)
“one should remember that the real wealth in California is in the south in that large urban area we choose to pretend does not exist.”
I think the back and forth was a result of this absolute bullcrap lie of a statement.
Not only does NorCal have more billionaires – an absolute fact.
But 8 of the top 10 highest income counties per capita are in Northern California, not Southern California – an absolute fact as well.
http://en.wikipedia.org/wiki/California_locations_by_per_capita_income
Sorry if the truth hurts. Now, come again, what the heck is “real wealth”
So let me get this straight, is an area better because it is wealthy? Is Carmel more interesting now then when it is was a real artist-writer colony 90 years ago? Are beach cities that used to have housing teachers and firemen could afford now better because they have billionaires instead?
I submit, the more wealthy the Bay Area becomes, the more boring and uninteresting it becomes to me. Does anyone think the Marina is the most interesting and inventive part of the city?
IF Southern California has less billionaires, maybe it is time for me to move South!
Longtime residents do get the impression that the City has changed dramatically and it is now become a place for the wealthy. The cost of living has increased quite a bit and the newer population has to be wealthier than the one that it is replacing.
The obnoxious braggers are typically the new money, even in Newport Beach. Talking about money used to be considered rude and can still be quite obnoxious to listen to it.
This website pegged SF pretty well (yes, I fit the stereotype discussed here far more than not — but I can still laugh at it):
http://stuffwhitepeoplelike.com/2008/03/23/91-san-francisco/
http://stuffwhitepeoplelike.com/2008/03/23/91-san-francisco/
The funny thing about that site if you read it enough is that that’s what the writers themselves like.
As a half-Asian, half-White gay boy, I feel right at home 🙂
Trip, that site is FUNNY! The comments about San Francisco are hysterical. When we think we are making individualistic lifestyle choices, are we really making mainstream decisions like everyone else in the current generation of “white people”?
“When we think we are making individualistic lifestyle choices”
You can always tell when someone is expressing their individuality because they look just like all the other people who are expressing their individuality.
Christian Lander is this generation’s Paul Fussell.
Except instead of serving in WWII, getting a PhD in English, then becoming a professor of some renown, Lander just dropped out of grad school 😉
I love the dated links some of you post to bring credence to your (fallacious) beliefs. Thanks for the 2000 census data, @clowns. Here’s an updated census from 2007.
http://en.wikipedia.org/wiki/Highest-income_counties_in_the_United_States
Turns out most California counties have dropped since your 2000 numbers. The richest counties are mostly back east. Here’s a Forbes 2008 listing with similar data. Not a single CA county in the top 14:
http://www.forbes.com/2008/01/22/counties-rich-income-forbeslife-cx_mw_0122realestate.html
But again, nice try. Can someone please post some links to articles from ’99 telling me how the internet is a new paradigm that will change everything, and that there’s no tech bubble? How about a link to a 2005 NAR article about how there is no housing bubble?
Dude, how about you go on and on about how San Francisco lost population again, then look at 20 links of late 2008 census data to the contrary, and tell us how it just can’t be true?
And as for your nationwide counties thing. Were we talking nationwide? I think everybody was talking Cali, bruh.
The lengths! You will all go! To back up the future-times platform from which you argue so strenuosly!
“Except for Santa Clara, none of the richest counties we found are in cities that contain some of the country’s most expensive homes, which only a select few can afford. Instead, suburbs are where most of the country’s money goes to live. ”
NOW, tell me again why having 17 billionaires means we are wealthy? Dude’s Forbes article presents some rather powerful points that wealth is not found in overpriced urban boutique neighbohoods. Perhaps LMRiM may be living where the “real wealth” is.
That is what is so obnoxious about San Francisco.
Oh so that is what is really so obnoxious about San Francisco. And here I thought it was because we referred to ourselves as “The City”, elected too many Communists to the Board of Supervisors and too looked smug driving our Toyota Priuses.
“Except for Santa Clara, none of the richest counties we found are in cities that contain some of the country’s most expensive homes, which only a select few can afford. Instead, suburbs are where most of the country’s money goes to live. ”
The Forbes article totally destroys so many “professional’s” claims for why San Francisco costs more than other large urban areas. The myth of housing prices in S.F. being driven by huge amounts of wealth is in fact false.
“The Forbes article totally destroys so many “professional’s” claims for why San Francisco costs more than other large urban areas. The myth of housing prices in S.F. being driven by huge amounts of wealth is in fact false.”
There is not an urban area on that list. That is a list of suburbia. “…second homes of wealthy doctors populate this small county…”. It is also not a list of millionaires. It is a list of homogeneous income by county.
WRONG, Santa Clara county is an urban area, and is on the list.
What’s the big city in Santa Clara county again? How many of the Forbes’ wealthy would you suppose live there, precisely? I mean I know several of the Warriors live in the condos at Santana Row. So there you go, the answer three. Jason Richardson got traded though. So that makes two. Just kidding. I actually like San Jose. But you get my point. Most of the richies you’re talking about live in smaller Santa Clara county towns north of San Jose.
i work for a community health center and we’re actually benefiting quite a bit from the economic stimulus plan, and are looking to hire internists and general practitioners (preferably those who are bilingual and speak Chinese or another Asian language). though we try to be competitive with salaries, i’m sure it still pales in comparison to private groups… but hey, a job is a job, right?
http://www.nems.org/jobs.htm
So let me get this straight Dude, your definition of millionaire excludes any wealth in real estate? So someone that owns $1M worth of Citibank is stock is a “Real Millionaire”, but someone who owned the Transamerica building outright and had only $900k in savings is fake? I think that is a bizarre definition to use, but it fits with your general contempt for everything real estate related.
Googling around a bit, I see that Claritas and the TNS Financial Services Affluent Market Research Program often differ from each other by a factor of 3 or more for the number of millionaires in The Bay Area for the same time period. Part of their difference is that TNS includes investment real estate but not one’s personal residence. Total net worth should include the value of all your assets and subtract all your debts, I think, but most of these surveys are paid for by marketers, so they are only interested in what you can spend, not what you own.
Subjectively, there sure do seem like lots of wealthy people here, both in SF and in the general area. Just walking around Pacific Heights, Presidio Heights, Seacliff, Cow Hollow, St. Francis Circle, Forest Hill, Russian Hill, and parts of Noe Valley, the Marina and Telegraph Hill, I sure do see lots of what appear to be wealthy people. I am not even going to get into places like Atherton and Hillsborough. Ask FAB what percentage of the people he knows are “Real Millionaires.”
But if your worldview is improved by assuming that everyone in the Bay Area is really living paycheck to paycheck and all the nice homes and cars you see have been purchased 100% on credit, more power to ya brah!
Now why do you keep doing this? Is there money here? YES! Do you need to travel more? YES!
Are we a world destination for wealth? perhaps.
Have you forgot about the poor parts of the East Bay? OF COURSE!
Really, enough with the false statistics claiming that this is Beverly Hills with homeless people. This city, which has become a partial bedroom community, is very wealthy compared to Oakland and parts of the East Bay. Our geography excludes the urban poor which are only 10 miles away. One of the most violent urban districts in the country can be seen in the distance if you have a bay view.
NVJ, do you ever get to NY? Washington? Chicago? London? Tokyo? The Westside of L.A.? I promise you, your eyes will be opened to a world of wealth FAR beyond what you see walking down 24th street or Union Street. There is a big big world out there. San Francisco is a unique place, but claiming it is Zurich is not going to fly.
Why do I respond to questions directly asked of me? Why does the amount of real wealth in the area matter? I hope these are not serious questions.
Accusing everyone who thinks that San Francisco is a nice place of provincialism is a pretty weak debating tactic, if you ask me. Rather than ad hominem, why not come up with something resembling an argument, like some data or subjective impressions or even an anecdote?
Because links, graphs, and surveys can mean anything you want to them to be. It is interesting to me how everyone (including YOU) loves to include Marin, Atherton, Saratoga, but what about Oakland, Richmond or some of the other East Bay pockets of poverty and extreme violence?
How wonderful it is that San Francisco did not get its imperial wishes over a century ago to expand its borders beyond the bay to the east, north and south. (See book “Imperial San Francisco), since if we had to include all of those poor areas, we would be no more special than Chicago or L.A.
NVJ, every prime urban American city could play this same game if they could reset their borders to exclude the poor. San Francisco is a great theme park for adults that pushed out the poor, and created an urban historical bedroom community for office parks to the south.
We are no longer the financial, cultural or industrial capitol of the west. We do have the best restaurants, wine, organic public markets, and coffee houses however. I love S.F., but having lived in London, Chicago and L.A., I also understand that it is very very small.