The headline read: “How Much $100 is Really Worth in Each State.” It was guaranteed to catch my attention. Apparently, The Tax Foundation has put together a comparison map of the cost of living across our great nation. They look at how much $100 is worth in relative locations. (FYI: The economic jargon for this is “Purchasing Power Parity.”)
The United States does not have an official “Cost of Living Index.” The closest we have is the Consumer Price Index, which is put together by the Bureau of Labor Statistics. It tracks the price changes of various consumer products (foods, clothing, etc.). This is on a national level and is used for, among other things, computing social security cost-of-living increases for the elderly. The Economist Magazine collects and publishes a World Wide Cost of Living survey. I briefly considered buying access to it for this article and my own curiosity, but it is cost-prohibitive for that.
It’s not really a surprise that the cost of living is higher in Boston than in rural Mississippi, but you also get investments in education and the greater expense to the municipality of battling snow and ice in Boston. But the United States is vast. Life in Hawaii is nothing like life in Wilmington, Alaska or New York City. Even in this state the expense of living varies greatly.
For example, when I lived in Boone, the common expectation was to drive an hour-and-a-half or two hours for major purchases, like appliances or cars, because the extra expense of trucking things up the mountain made them more expensive in the stores. The winters there are long and intense; the expense of salt trucks, road scrapers and the infrastructure needed to address the constant snow and ice gets costly. By contrast, we really are not prepared for ice storms here (witness the two we had last year that virtually shut us down for a month). Consequently, the information that breaks down cost of living on a state-by-state basis and municipal areas really fascinate me. Apparently, in Wilmington’s metropolitan statical area, $100 has the buying power of $105.60.
For more target answers, I found a cost-of-living comparison calculator on CNN’s website that could entertain me for hours. You plug in two cities, and the calculator will show you the percentage difference in cost for groceries, housing, transportation, utilities, and health care between the two areas. For example, comparing New Hanover to Dare County (the Outer Banks) shows that housing is 25 percent more expensive but that health care is 7 percent less. The Tax Foundation claims $100 has the spending power of $116.69 in non-metropolitan areas in NC. Given the expense of getting items across the bridge, and tourists virtually are trapped and willing to pay any price, I’m not certain it is an accurate assement of the Outer Banks.
There is a 130-percent difference in the cost of housing between Wilmington and Los Angeles—which, of course, brings me back to thinking about the film industry. All the nice fairy tales about Dino De Laurentiis aside, he came here because it was cheap for him to make movies. His dollars went farther, and as a right-to-work state, he didn’t have to appease the unions the way he would in California or New York. The film industry follows the bang for their buck, and right now there are other states offering better incentives, so they have gone there.
But that’s not different from most businesses. The Tax Foundation, who released this study, was founded in 1937 by Alfred P. Sloan Jr. and Donaldson Brown of General Motors, and William S. Farish of Standard Oil (Exxon). Obviously, these guys were not looking to put together a think tank that would say, “Raise taxes and do good things for poor people.” Actually, for a while it was operated by “Citizens for a Sound Economy” (the Koch brothers’ front).
Part of what makes this interesting to me is that economies don’t operate in a vacuum: Money comes into the system, money leaves the system. Much of what we talk about within Live Local is trying to trap more money coming into our system and letting less of it escape. So, when we look at how much money it costs to live here in comparison to other places, we start to get a better understanding of what we need to bring into our economy to make it flourish.
Obviously, our lower cost of living has attracted much growth to the area from New York and New Jersey, thanks to lack of blizzards, lower property taxes and expenses. People are OK with a very short commute (lower transportation costs) from Brunswick and Pender counties to enjoy a variety of activities in Wilmington. Quality-of-life wise, we have beaches, the river, theatre, film, music, art, night life, and an assortment of sports offerings. What’s not to love? There’s no more commuting over an hour into New York, dealing with parking, getting an overpriced meal, and spending more than $200 on theatre tickets. For comparison’s sake, according to The Tax Foundation, in Newark, New Jersey $100 has the buying power of $81.77. No wonder people keep flooding into Brunswick Forrest.
With an over $150-million shortfall in our state budget, perhaps now is not the time to turn away business (like film). One might argue that that shortfall would cost more in California than it does here. I’m not certain that raising taxes on existing resources in our economy is the answer to the shortfall; rather, I think we need to talk realistically about how to attract more money into the system from the outside.
Don’t misunderstand me: I am proud and grateful to live in Wilmington, and have chosen to be here over anywhere else. But that doesn’t mean I see our state and area without blemishes. Surely, the best way to show affection is to want to see your love flourish and improve?
It is hard to quantify the quality of life living somewhere (hence quality vs. quantity—an important lesson in middle-school science class). For a childless adult, this is a wonderful place to live. However, if I had to make choices about a child’s education and childcare options, I’m not so sure I would be impressed.
A decade ago I was approached for an informal exit poll after voting by one of the news stations. On the ballot was a school-bond referendum. When I answered that I had voted in favor of the bond, the reported said that obviously I had children. No, I interrupted him, I didn’t. “Why would you vote for a school bond if you don’t have children?” the surprised young gentleman asked me. I responded because I would rather invest in our future than in building a new jail.
That might sound over-simplified, but if we really want to talk about quality of life and cost of living, both now and in the future, perhaps it’s time we talked about investing our money here and with something that pays dividends.