A dollar can’t buy you the same things everywhere in the world. That’s something that a lot of people usually don’t understand and/or consider. A dollar buys me a heck of a lot more in Angola than it does in Reykjavik. This applies to different areas in the United States as well. A dollar in San Francisco doesn’t go nearly as far as a dollar in Wyoming. So making a $50,000 salary in Wyoming will buy me a lot more stuff (and hence make me effectively wealthier) than a $50,000 salary in San Francisco.
But how far does this reasoning go? According to this article, New York City is the poorest big city in America. Yes, even poorer than Detroit. If this seems to bake your intuition noodle, try not thinking about it in terms of how much money the average dweller in that city makes. Instead, consider how much the average person in that city makes and what it can buy. Housing in the Big Apple, for one, is ridiculously expensive. The cost-of-living, meaning everything from food to utilities to transportation, is so high in NYC that their residents are effectively poorer than Detroit’s.
I’d still want to live in New York instead of the current armpit known as Detroit because of New York’s non-monetary awesomeness. Effective wealth is still something people commonly overlook.