This was the topic of conversation this weekend between my wife and I and 4 other couples that we are friends with, each of us with young children. We live in SoCal. We have young kids. We basically can afford to live here, despite having high-paying, dual-income households. That's it, we can afford living. We can't afford to go to Disney very often. We can't afford to go to the San Diego Zoo very often. We're keeping pace with house and car payments (this was a big one for my wife and I, we no longer have car payments and are doing everything we can to make our situation work with the automobiles that we have), with childcare, and trying to put away money for our kids at the expense of the local economy.
I somehow don't feel any more financially secure or independent; I don't feel like I have more discretionary income than when I first moved to California and was making $10/hour. My own conclusion is that it's a feature of our economy, it's by design.