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Thursday, October 5, 2017
Cost of Living: Honolulu adjusted salaries lowest in USA
By Grassroot Institute @ 1:39 PM :: 6244 Views :: Hawaii Statistics, Cost of Living

Living in Hawaii is Too Expensive

Earlier this year, the Grassroot Institute of Hawaii created a popular video about our state’s problem with “flight” — the large number of families leaving Hawaii for places with lower taxes and lower costs of living.

And yet, the average salary in Honolulu doesn’t seem so terrible. When you look at listings of the highest-income metropolitan areas in the U.S., whether by median household income or per capita, Honolulu is comfortably in the top 10.

But you’d have to look long and hard to find a local who feels as rich as the statistics claim. And that’s partly due to the cost of living.

We all know Hawaii has a punishing cost of living, but did you know that it’s arguably the hardest city in the U.S. to make ends meet?

That's according to recent study by Indeed, which calculated the average salary in 104 American metropolitan areas, then adjusted it for living costs to find out how far that salary really goes. Unsurprisingly, the cities with big, fat average salaries (like New York and Los Angeles) also had big, fat living expenses.

But no city fared worse than Honolulu. 

Indeed calculated the average salary in Honolulu to be approximately $74,553. But when adjusted for the cost of living, that salary sunk to $59,882. The drop gave Honolulu the lowest adjusted salary in the country. (The second lowest was Tuscon, which was still $7,000 higher.) Moreover, Indeed’s explanation for Honolulu’s poor ranking should hit a nerve with advocates for Jones Act reform:

“Poor Honolulu. Its salaries aren’t that high to begin with and, after adjusting for its high cost of living, it’s the most expensive metro in the country. Honolulu is expensive not just because of housing costs. Housing actually is more expensive in San Francisco and San Jose, but housing accounts for only one-third of the typical American’s total expenses. In Honolulu, physical goods cost more because they have to be shipped to the middle of the Pacific.”

Add in the state government’s affection for surcharges and tax hikes, and you'll see why so many Hawaii expats say they can’t afford to come home. 

Honolulu may never be as inexpensive as Birmingham, Alabama (where adjusting salary for cost of living results in a $10,000 gain). But there are things we could do to reduce the cost of living.

Hawaii’s leaders should commit to policies that would make our state more affordable — like cutting taxes and modernizing the Jones Act. Otherwise, we’ll see even more families fleeing Hawaii for better opportunities in the mainland.

E hana kakou (Let’s work together!),

Keli'i Akina, Ph.D.

President/CEO, Grassroot Institute

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Cities Where Salaries Go Furthest in the U.S.: 2017

Indeed Hiring Lab, August 24, 2017

When looking at jobs in different local markets, a dollar is not always a dollar—and sometimes it isn’t even a dollar. Paychecks go further where housing and other costs are lower. This is the dilemma job seekers face: The places with the highest salaries also have the highest cost of living.

Salaries are highest in San Jose and San Francisco, but that doesn’t take into account the cost of living. When you factor in how much more expensive it is to live in the Bay Area, the rankings flip entirely. It turns out that when salaries are adjusted for cost of living, they tend to be higher in smaller metros than in the largest ones. Adjusted salaries are highest in Birmingham, AL, Jackson, MS, and Fresno, CA—places where what you’re likely to earn buys the most. Big cities like Miami, New York and Los Angeles are among those where your salary won’t stretch far.

So should job seekers write off metros where salaries don’t keep up with the cost of living? Not necessarily. Some people want a huge city, despite the high costs. If that’s you, consider Detroit or Atlanta, and check out the list below. In fact, a low average adjusted salary just might be a signal that a city is special for reasons other than money. Plus, places that look like a worse deal today might offer greater job security tomorrow.

Living large in Birmingham, and just getting by in Honolulu

Big salaries and high prices go hand-in-hand. The five metros with the highest salaries—San Jose, San Francisco, Washington, DC, Fairfield County, CT, and New York—are among America’s most expensive places to live. That makes sense. If there were some magical place with fat paychecks and low prices, people would flock there—flooding the market with workers while bidding up the cost of housing—and the magic would fade.

But salaries and prices don’t all even out in the wash. To find where salaries go furthest, we calculated the average salary for all jobs with annual-salary information posted on Indeed between August 2016 and July 2017 in each of the 104 US metropolitan areas with at least 500,000 people, and then adjusted for each metro’s cost of living.

When we adjust for living costs, those big coastal metros with high average salaries no longer look like a good deal. Instead, as noted, the highest adjusted salaries are in Birmingham, AL, Jackson, MS, and Fresno, CA. Not a single big coastal metro ranks among the top 20, but plenty of smaller metros in the South and Midwest do. The only California metros among the top 20 are far from the Pacific—in the Central Valley metros of Fresno, Bakersfield, and Modesto, where housing is much cheaper than on the coast.

Where do salaries stretch the least? Poor Honolulu. Its salaries aren’t that high to begin with and, after adjusting for its high cost of living, it’s the most expensive metro in the country. Honolulu is expensive not just because of housing costs. Housing actually is more expensive in San Francisco and San Jose, but housing accounts for only one-third of the typical American’s total expenses. In Honolulu, physical goods cost more because they have to be shipped to the middle of the Pacific. Altogether, Honolulu’s adjusted salaries are the lowest in the country, more than $7,000 below the next lowest, Tucson, AZ—a bigger gap than the difference between top-ranked Birmingham and Baton Rouge, number 20.

After accounting for cost of living, some of the metros with the highest unadjusted salaries tumble into the bottom 20, including Washington, DC, and New York. Not San Jose and San Francisco though. Unadjusted salaries in these Bay Area metros are so high that, even after adjusting for local prices, they still rank in the middle of the pack, nowhere near the bottom 20.

read … Entire Report



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