The cost of living can have a big impact on how your income actually stretches. Therefore, adjusting wages for living costs can provide a better glimpse at how much people actually make, suggests a study by Jose Lobo of Arizona State University. Lobo crunched data from the U.S. Bureau of Economic Analysis to find the "real average wage per job," taking into account cost of living and real per-capita personal incomes.
Jobs = Real Estate
"Knowledge hubs and energy centers — those that have both very high wages and generally fair high costs of living, especially along the coasts — dominate the list," The Atlantic CityLab reports. Also, energy metros rose to the top due to a natural gas boom that is rapidly increasing wages in some areas of the country, while cost of living has remained lower than their big-city counterparts, the study notes.
Workers in higher-cost places still tend to do better than most, even when taking into account the higher costs for housing and other expenses, the study suggests. "Their higher wages more than compensate," the article notes. "This takes some of the wind out of the sails of the arguments that people are better off moving from higher-cost to lower-cost places. The underlying factors that improve productivity and increase wages in the first place help workers do better in these high-cost metros."
According to Lobo's study, the following are the metros with the highest real average wages:
- San Jose-Sunnyvale-Santa Clara, Calif.: $75,288
- Bridgeport-Stamford-Norwalk, Conn.: $64,321
- San Francisco-Oakland-Hayward, Calif.: $60,562
- California-Lexington Park, Md.: $59,130
- Durham-Chapel Hill, N.C.: $58,166
- Midland, Texas: $58,153
- Houston-The Woodlands-Sugar Land, Texas: $57,461
- Midland, Mich.: $57,328
- Trenton, N.J.: $55,317
- Boston-Cambridge-Newton, Mass.-N.H.: $55,306
Source: “Where Americans Really Earn the Most From Their Paychecks,” The Atlantic CityLab (July 14, 2014)
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