There is a lot more to relocating for a job than a bigger paycheck
Fair enough: There’s a limit to what mere mortals can learn from the career decisions of people who can routinely hit three-pointers under pressure or jump over other world-class athletes to dunk basketballs.
But a closer look at the high-profile decision-making process of NBA superstars LeBron James and Carmelo Anthony over what teams they’ll be playing for next season reveals that they grappled with questions that many of us face when deciding whether or not to take a new job.
Should you always take the higher salary?
If salary were the only factor when Anthony was weighing whether to stay with the New York Knicks or move to a new team, his decision would have been clear days or weeks ago. After all, the Knicks offered Anthony more than $120 million over five years to stay in New York vs. “just” $96 million from the Los Angeles Lakers and $75 million from the Chicago Bulls for four-year contracts. That comes out to $25.8 million a year to stay with the Knicks, $24.3 million to join the Lakers and $17.5 million to be a Bull.
But other factors apparently gave him pause. The Bulls are considered the team with the best shot at a championship next year, so a move to Chicago could have boosted Anthony’s chance at post-season glory. And Los Angeles might have provided better job opportunities for his budding actress wife, La La Anthony. In the end, it appears that money ultimately swayed Anthony to stay with the mediocre Knicks.
And while we don’t yet know all the details behind LeBron James’ decision to go to the Cavaliers, staying in Miami could have meant a pay cut if the team needed to make room for more high potential players.
In any case, it’s worth considering the possibility that joining a company that’s on a faster track or at top in its industry can pay off in the long run, even if it means less money upfront. Rosemary Haefner, VP of human resources for jobs site CareerBuilder, says you should make sure you see a clear opportunity to add skills that will advance your career or otherwise help you move you up the ladder faster — or that you’ll be able to accomplish something that will make you more attractive to future employers. That could mean a chance to add management experience to your resume, work closely with the top brass, or be part of cutting-edge projects.
Should I consider cost of living?
If you consider moving for a new job, take care that a higher cost of living in the new city won’t eat up any additional pay, warns Erol Yildirim of the Center for Regional Economic Competitiveness, which publishes a quarterly cost of living index for the U.S. “There’s a lot more than income that affects your standard of living,” he says. That may not be such a big deal for someone like Carmelo Anthony, even though New York City is regularly at the top of the CREC list, with the after-tax cost of living in Manhattan at twice the national average.
Housing is the biggest expense (for most people about 30% of income goes to home-related expenses). The index also takes utilities, groceries, transportation and health care into account. You can use salary data provider Payscale’s cost-of-living calculator, which will not only show you the cost-of-living difference, but how much you need to make in the new location to maintain your current standard of living.
Do taxes matter?
Taxes can take a big bite out of your income. You can’t escape taxes altogether, of course, but some places are friendlier than others. LeBron James, for example, is leaving one of just seven states that has no income tax. In New York, Anthony will be in one of the highest taxing states in the U.S. New York City is one of the few cities in the U.S. that has its own income tax and New York state has the eighth highest state income tax rate. Beyond income taxes, you should factor in property taxes and sales taxes too. You can find details for taxes on income, property and retail sales for every state at the Tax Foundation.
Is job security more important than a bigger paycheck?
A Knicks deal allows Anthony, now 30, to lock in a high paycheck for five years, one more than he’d been offered in either L.A. and Chicago. He might not command nearly as much as a 34-year-old free agent as he does now, so staying with the Knicks offers financial security. The lesson for the rest of us? If you’re at the peak of your career – for most people that’s in their 40s and 50s – this is the time when you have the highest earning power. If you’re valued at your firm, trading stability for a new job where you need to establish yourself is a risk. “When you’re the new guy, you may be more vulnerable if rocky times hit,” says Haefner.
What does a new job mean for your family?
Family was definitely a factor for LeBron. He told Sports Illustrated that returning to his hometown was always his intention: “I have two boys and my wife, Savannah, is pregnant with a girl. I started thinking about what it would be like to raise my family in my hometown. I looked at other teams, but I wasn’t going to leave Miami for anywhere except Cleveland. The more time passed, the more it felt right.”
Anthony publicly said his decision also hinged on how it would affect his family. Beyond his wife’s opportunities in Hollywood, the Anthonys have many ties to New York. La La Anthony grew up in New York and Anthony spent his early years there before moving to Baltimore. Moving their seven-year-old son Kiyan to a new city would have been another challenge. In an interview with VICE Sports, Anthony said
“My son goes to school and loves it here (in New York). To take him out and take him somewhere else, he would have to learn that system all over again. I know how hard that was for me when I moved from New York to Baltimore at a young age, having to work your way to try to make new friends and fit in and figure out the culture in that area.”
Talk about what relocating would mean for your family. Will your spouse be able to get a comparable job? If you have children, what are the schools like? How will the kids feel leaving friends behind? Is the lifestyle a good fit for everyone? How far will you be from your extended family?
Relocating will have a major impact on your professional and personal life. The more factors you weigh, the better the decision you can make, whether or not you make a multi-million dollar salary.