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Why living in a big city and raising your salary doesn’t pay off

Dave Buttersby and Cindy Macadam have always planned to return to life in a small town. The COVID-19 pandemic only speeded up the couple’s plans.

“It was very scary to pick up and move during a pandemic,” Buttersby told Global News.

In April 2020, they sold their 1,000-square-foot home in the Davisville Village district of Toronto and moved to a 5,000-square-foot home in Cobourg, Ontario, with a vast backyard and outdoor pool. The price difference between the two real estates allowed them to buy new mortgages for free, leaving enough money to buy investment real estate as part of their retirement plan.

Labor shortages across Canada have led to significant wage increases for many job seekers.

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“We now have a home that can entertain our guests, and they also have plenty of space to stay,” says Buttersby. “We have a pool that kids enjoy every day during the summer.”

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Buttersby, director of media sales advertising, has expanded his responsibilities while reducing the need to commute to Toronto twice a week for 1.5 hours without impacting his annual salary.

By significantly reducing housing costs, they were able to take advantage of big city payments.

David Buttersby and Cindy Macadam moved their family from Toronto to Cobourg early in the pandemic.

David Buttersby and Cindy Macadam moved their family from Toronto to Cobourg early in the pandemic.

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Researchers at the University of California, Berkeley and the US Census Bureau released a report this month entitled “Places, Places, Places.” This report delves into whether high salaries in the heart of major cities are worth moving to big cities. The lead author of the report, David Card of Canada, was named the Nobel Prize winner in economics for labor market research on Tuesday.

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What are their conclusions? it’s complicated.

According to the report, coordinating various factors such as education and skills to move from a small community to a larger, higher-paying area will reduce real income. “Housing costs consume more than 100 percent of the nominal income gains from moving to larger or higher-income commuting zones,” the report said. rice field.

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According to some economists, the flexibility of the new COVID era in the form of remote locations and hybrid working models is expected to shift that calculation even further.

Linda Nazareth, an economist and senior fellow at the McDonald’s Laurier Institute, said companies may want to lower wages for employees living in low-cost jurisdictions, but talent is due to tight labor markets. It states that the ability to do so to compete can be hampered.


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The pandemic has amplified the existing trend of migration from downtown, which began after 2015.

Phil Soper, CEO of RoyalLePage, told Global News: “And the first wave of baby boomers began to retire, and they no longer had to live in the city center.”

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According to Royal LePage, this trend is gradual, but accelerated from last year to this summer. Migration has pushed rural and suburban home prices to new heights. House price tags have risen by an average of 33 percent during the pandemic, according to the latest Royal LePage figures released on Friday.

According to Thorper, Royal LePage focuses on the mobile pockets of people traveling from the two most expensive megacenters, Toronto and Vancouver. The main impetus for this trend is the move from Ontario to Atlantic Canada, Lower Mainland to Kamloops, northern British Columbia, or Alberta to Okotoks, Turner Valley, and even Calgary.

Should the place where you live determine your wages?

Last summer, tech celebrities such as Google and Facebook announced plans to reduce compensation for employees who chose to work from home in a city with low living costs.

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A Google Canada spokeswoman said in an email to Global News, “There is one compensation category in each country outside the United States, so there is no difference in salary between fully remote and in-house employees.” Stated.

Facebook Canada did not respond to Global’s request for comment.


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Should remote employees living in cheaper areas receive wage cuts?


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Given the current gap in technical skills and the shortage of workers in high-demand areas, Nazareth says talent is predominant.

“We are seeing this debate beginning about whether we should pay different wages to people working in different places. I don’t think it’s overkill, but it’s part of the big picture. It’s a club, “she says.

According to Statistics Canada, one in four workers can now work remotely.

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“It’s hard to find good people. If you find the workers you want not near your office, you’ll be pretty flexible about getting them to work with you,” says Nazareth. increase. “When it comes to options, I think everything is in the table.”

Hiring is part of Buttersby’s job, and he says “the best thing people ask” is whether the position can be done from home or outside the office. He understands his desire for flexibility.

Getty Images.

Getty Images

He says COVID encouraged him to prioritize time with his two sons, Gavin (9) and Carson (5).

“I’m spending less time in the car now. I haven’t worked for 10 or 11 hours,” says Battersby. “I have the opportunity to spend a fulfilling time with my family. It really changed our lifestyle. I was no more happy about our decision to move.”

© 2021 Global News, a division of Corus Entertainment Inc.



Why living in a big city and raising your salary doesn’t pay off

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