How to Increase the Value of a Dollar? Move.
NCPA October 24, 2014
The state of Kansas may soon be flooded with surgeons, if doctors take a look at a new tool from Rasmussen College. The school's salary-comparison model uses Bureau of Labor Statistics and Bureau of Economic Analysis data to adjust salaries based on a state's cost of living. According to the tool, surgeons in Kansas make more than surgeons in any other state based on the adjustment: $277,820 annually.
(Hawaii salaries are 16th highest in USA. When adjusted for cost of living, Hawaii salaries drop to 50th.)
The tool can look at individual occupations and compare the value of salaries across states. In general, however, it determined that workers in Washington, D.C. earn more than workers elsewhere both before and after adjusting for cost of living. That is not the case in all instances, however. Postal workers in the nation's capital have the highest average salary pre-adjustment, at $56,500. But after considering cost of living, that drops nearly $10,000, to $47,800. Washington mail carriers may want to move to Ohio, where postal carriers earn more than $63,000 annually after adjusting for living costs.
According to the tool, teachers are best off in Rhode Island, while CEOs earn the most pay in North Carolina, at an adjusted salary of $224,858. While CEOs in Connecticut have the highest average pay in the country, their paycheck falls to $193,647 after adjusting for cost of living. Similarly, financial analysts in New York lose $13,000 after taking cost of living into account, with average salaries falling from $97,490 to $84,480.
NCPA Senior Fellow Pam Villarreal discussed this issue recently in a study on teacher pay in major metropolitan areas. She explained that while teachers in Los Angeles have the second-highest salary in the country, at $74,280, that salary drops to $56,963 after taking cost of living into account.
Similar to the cost of living tool, the NCPA has developed a state tax calculator. The calculator allows anyone to plug in their income information and see how much money they would gain (or lose) from moving to another state.
Source: Eric Morath, "With Your Job, Where Should You Live? If You\'re a Surgeon, Kansas," Wall Street Journal, October 23, 2014; Rani Molla and Lindsay Gellman, "The States Where Your Paycheck Goes Farthest," Wall Street Journal, October 23, 2014.