When Americans consider a move to another part of the country, they sometimes are forced to make a tough choice: should they go to a city with the best job opportunities, or a less economically vital area that offers a better standard of living, particularly more affordable housing? However, there are still plenty of metropolitan areas in the U.S. where you can get the best of both worlds.
Center for Opportunity Urbanism senior fellow Wendell Cox has developed a set of rankings that identify metropolitan areas where salaries are relatively high relative to costs, and you get more for your paycheck. Our list is geographically and demographically diverse, both in terms of the top 20 and the places closest to the bottom.
The COU Standard of Living Index takes the 2015 mean pay per job in the 106 metropolitan statistical areas with more than 500,000 population and adjusts it by cost of living. Metro areas that have a large proportion of high-wage jobs tend to do best, such as San Jose, Calif., and Houston. The biggest differences in terms of cost of living generally have to do with housing; costs for goods varied by 23 percent and for services by 35 percent in 2014 across the metropolitan data, but for rents the differential between the most and least expensive metro areas is 194 percent and, for housing purchased in 2014, a remarkable 775 percent. The composite cost of living index underlying the COU Standard of Living Index is developed from a blend of annual rent as well as home ownership costs for prospective home buyers.
I have divided the top and bottom rankings into four basic groups: expensive but worth it; moderately priced but still high income; expensive but so costly as to be economically barely worth it; and, finally, areas that are cheap, but not for the right reasons.
Expensive, But Worth It
There are several high-cost areas that do very well in this ranking, largely because they offer high incomes to match. The metro area with the highest annual wage when adjusted for cost of living is San Jose, the center of Silicon Valley. The cost of living there is 63 percent higher than the national average, the highest in the nation, but with the highest nominal pay per job at $112,300 ($27,000 above the next best), the metro area still ends up with the highest adjusted paycheck of $68,850.View Article