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Author Topic: Cost of living index found  (Read 13425 times)
Zxcv
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Cost of living index found
« on: March 08, 2003, 04:04:17 am »

I was digging around with a search, and noticed someone came up with this cost of living study done by the American Federation of Teachers (of all folks!). It is here:
http://www.aft.org/research/reports/col/Colpape3.htm

The results using equation 3, which from a quick read seems to be the best one to use (from best to worst):

MT 91.1
ID 91.3
SD 91.6
ME 92.0
ND 92.2
WY 93.4
VT 93.9
DE 103.2
NH 107.9
AK 123.1 (see note below)

Unfortunately this study did not have AK numbers, because: "Alaska and Hawaii are exluded because of unique factors involving climate and transportation." So I looked elsewhere and found some numbers here:
http://www.bestplaces.net/html/col3.asp?fcity=0380&tcity=9160&amt=50,000

I'm not entirely satisfied because this is a city (Anchorage) number, not a state one, but I don't know what else to do. It sure is high!

If anyone else has a better source, let me know. I will stuff these in my big spreadsheet. It should probably be weighted the same as the "income" row.
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Re:Cost of living index found
« Reply #1 on: March 08, 2003, 09:49:02 pm »

For big states, this makes ID look a fair bit better than NH...

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Re:Cost of living index found
« Reply #2 on: March 08, 2003, 10:32:35 pm »

Having a very high average household income hurts a state.

The reason?  Everyone that wants to help the FSP will not be able to move to the chosen state.  Some people will have to take care of their elderly parents; others might not be able to move because the cold hurts the arthritis in their knees or they are divorced and want to be near their children.  There are many other possible reasons.  People might think they are making some progress in warm, dry, and sunny New Mexico but they are still willing to help the chosen state out, financially.  Should the FSP just give up on these people?  NO!  We should encourage them to help us out the only way they can, by financially supporting the various freedom projects that will be going on in the chosen state.  

Right about now you are saying, that makes sense, let them help us.  However, what does that have to do with mean household income?  Simply this, money goes further in a state with a low mean household income than in a state with a high mean household income.  The people from New York City, Dallas, San Diego, San Francisco, Chicago, Philadelphia, and Atlanta that make $60,000 per year are likely to give the same amount of money to the freedom movements of the chosen state no matter which state is picked.  That money will go much further in a state like Wyoming where the mean household income is around $38,000 than it will in New Hampshire where the mean household income is $50,000 or Alaska where the mean household income is $52,000.    

Secondly, choosing a state with a mean household income that is not disproportionately higher than most of the country helps the movement in other ways.  If a woman moves to the chosen state and has saved up $20,000 that she wants to give to the freedom movements of the state, this money will have more value in a state like Wyoming or North Dakota than it will in a state like New Hampshire or Vermont.  It is not a coincidence that Wyoming and North Dakota have lower costs of living than New Hampshire and Vermont do.  The general pattern is that the higher the mean household income of a state or city; the higher the cost of living in that state or city is.  

Housing costs must also be considered as part of this equation.  If a family owns 50% of a house that costs $300,000 in California and sells that house they will have around $150,000 to buy a new house in the chosen state.  Now, would that $145,000 buy a better house and more land in a state like Wyoming will low housing and land costs or a state like New Hampshire with high housing and land costs? The answer is clear, the family benefits from moving by moving to Wyoming and in punished if it moves to New Hampshire.  What about the opposite? For example, if an average family from Alabama or Oklahoma wants to move to the chosen state and owns 25% of their $100,000 house or has around $25,000 in equity, will this money go further in Wyoming with low housing costs or New Hampshire with high housing costs?  It might be so hard for the family to get a house in New Hampshire they are forced to live in a low-quality apartment.  I know this is not the end of the world (I currently live in a apartment) but it is still an issue for that family.

Wyoming does not have a low mean household income.  Wyoming’s average household income is around $1,000 below the national average.  Four of the other candidate states have higher mean household incomes than Wyoming while five have lower ones.  This puts Wyoming about in the middle.  If you want to take this strategy to the extreme, Montana is lowest with an average household income of $33,000.  However, in my opinion, that is too low.  Wyoming, on the other hand is just around the national average.  This is good because this means the money coming to Wyoming will be worth more in the local economy than the money would be in Alaska or New Hampshire but at the same time the people from Wyoming will be able to afford to buy out of state products and travel out of state.    

Also, Wyoming has a low cost of living at only 93.4% of the national average.  This means the average family would benefit by moving to Wyoming.  Delaware, New Hampshire, and Alaska, on the other hand, have high cost of living levels.  There levels are 103.2%, 107.9%, and 123.1% of the national average, respectively.  Montana has the lowest cost of living at 91.1%, but also has the lowest average household income.  After Montana’s average household income is adjusted for cost of living it is still the lowest at $35,900.  Wyoming, after adjusted for cost of living is $40,400 or just over the adjusted average household income in the United States.

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Zxcv
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Re:Cost of living index found
« Reply #3 on: March 08, 2003, 11:10:42 pm »

Keith, where do you get these numbers? It is interesting to have income adjusted for cost of living. I take it the income figures we now have in the spreadsheet are not adjusted for cost of living?

Actually, I'm not sure I agree with your other point. A state can have a high cost-of-living-adjusted income either because it has a very high income in a middling cost of living, or a middling income in a low cost of living. So even though DE has the highest cost-of-living-adjusted income, that does not necessarily mean people will have trouble transferring their small home equity to it. For that you have to check the straight cost of living, the numbers I dug up. And its true, DE is a bit higher than the national average of 100.

The ideal for us (I think) is a high non-adjusted income in a low cost-of-living state. However the two probably correlate pretty well...

Doesn't AK supply every resident a subsidy from the oil income? The high cost of living would explain that reasoning. But there will be hell to pay when the oil runs out.

Well, if no one knows what to do with the AK data, I will use it as it is. But I wish I had a better number for it.
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mactruk
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Re:Cost of living index found
« Reply #4 on: March 10, 2003, 07:44:45 pm »

  It still depends on what - you - do for a living.  If you work for the gov these numbers might mean somthing.
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Zxcv
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Re:Cost of living index found
« Reply #5 on: March 11, 2003, 12:49:53 pm »

Quote
Quote
The ideal for us (I think) is a high non-adjusted income in a low cost-of-living state. However the two probably correlate pretty well...
Vermont, and then Wyoming are the closest to what you are describing.

Not so.

I took my big spreadsheet, and multiplied the normalized variables for income times the cost of living (roughly equivalent to getting the ratio of income to cost of living). Here's what I got (highest numbers are best):

DE, NH 81
VT 77
AK 74
ID 73
WY 72
ME 71
SD 68
ND 66
MT 64

I then realized the income column is probably before taxes, so I factored in the tax row to get a number that is (I think) ratio of after tax income to cost of living (higher numbers are best):

AK 740
NH 593
DE 501
SD 471
WY 460
VT 440
ID 436
ND 409
MT 403
ME 351

Alaska's low taxes really helped it here, and VT's high taxes hurt.

Of course this is hardly the whole picture. You have to think of federal taxes, which are a larger chunk stolen than state taxes are. Guess what? Federal tax rates are uniform across the nation. So it's better in that respect to live in a low cost-of-living state with lower income, than a high cost of living state with a proportionately higher income. You'll get dinged less by the feds. So DE, NH and AK probably do not have quite the advantage it appears here.

All this is quite interesting, but not very important, if you ask me.

mactruk, I think that cost of living was generated as a general measure, not specific to government workers (who see roughly the same cost of living as anyone else, anyway).
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Zxcv
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Re:Cost of living index found
« Reply #6 on: March 11, 2003, 01:37:29 pm »

Actually, now that I think of it, taxes are probably factored into the cost of living, so that second table probably doesn't make so much sense (for this and other reasons). Or maybe the whole thing makes no sense!  Tongue  It is hardly a scientific determination...
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Heatherj
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Re:Cost of living index found
« Reply #7 on: March 11, 2003, 07:27:30 pm »

Is it possible, when figuring cost of living, to factor out the effect of Indians living on reservations?  In MT, certainly, there is probably enough of a percentage of the extreme poverty common on Indian reservations to skew the numbers, as it is a factor that doesn not have much of an effect off the reservations.
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mactruk
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Re:Cost of living index found
« Reply #8 on: March 11, 2003, 08:34:31 pm »

  Gov workers are not paid via a local scale.  The average non gov  pay in MT is 24-28k per year - tell me what gov job pays that anywhere?  
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Zxcv
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Re:Cost of living index found
« Reply #9 on: March 11, 2003, 11:57:55 pm »

Oh, I thought you were having issues with the cost of living number. The income for each state probably includes government workers. They will skew the numbers some, but their numbers are small enough it shouldn't have too much effect. And every state has them, too, so they mostly cancel out in our comparisons, I think. It's the comparisons that are more important, not the absolute numbers.

Heather, I can't think of a way unless you find an MT-specific site that factors them out. There are also city-by-city comparisons that obviously would not include the reservations, but they don't jive well with the state-wide measures, I've found.
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Re:Cost of living index found
« Reply #10 on: March 14, 2003, 10:57:22 pm »

  according to the 2000 census median hourly wage in TN was 17.48 per hour. In MT the median wage was 15.87.  I live in a small town here in MT and I know a lot of people in this area and I can assure you the average guy here does not make 15 per hour.  The average store clerk or gas station dude or waiter is happy to get 8 to 10.  The average family man drives without insurance and has no medical insurance - this is how you live on 10 an hour.  So what does this say about the numbers in the census?  Now fed and state wages dont include medical insurance that is paid by the tax payer - same with retirement.  14% of the people in MT live under the poverty level - TN has 13% problem  - 13 out of 100 people.  The middle class here in MT is government!
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Re:Cost of living index found
« Reply #11 on: March 15, 2003, 08:47:51 am »

Your town sounds about like Asheville.  My wife is making $11/hr as a "project manager" at a bank, and I'm making $8.50/hr through DSL tech support.  And the cost of living in Asheville is higher than anywhere else in the South.  We can't wait to get out of here; even Montana sounds like heaven from an economic standpoint compared to this.
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Re:Cost of living index found
« Reply #12 on: March 16, 2003, 12:41:29 am »

Yes, we realize that now. Tongue
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"Educate your children, educate yourselves, in the love for the freedom of others, for only in this way will your own freedom not be a gratuitous gift from fate. You will be aware of its worth and will have the courage to defend it." --Joaquim Nabuco (1883), Abolitionism
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Re:Cost of living index found
« Reply #13 on: August 25, 2003, 02:54:44 pm »

Anything over $6/hour sounds pretty good.
Can we rent a trailer and lot for under $200/month?
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