Americans are continuing to feel the squeeze of rising cost of living—but some people fare worse than others.
A new study from a travel and credit card publication shows that residents in several high-profile and desirable U.S. cities are losing money every day they live there due to cost of living far exceeding the median living wage.
The cities are many of the usual culprits that you might suspect have soaring costs of living, but others may surprise you.
Keri Stooksbury, editor-in-chief at Upgraded Points, said her team sought to highlight where the disparity is at its worst, by comparing median annual wage data from the Bureau of Labor Statistics with “living wage” estimates from the Economic Policy Institute’s Family Budget Calculator.
Living wage is essentially what people need to be earning in order to cover essential living expenses
All 50 states were included in the research, as well as the 100 largest U.S. cities. In some areas, cost of living is manageable thanks to higher wages. But in other regions, the average person’s paycheck might already be gone before it hits their bank account.
“The gap between earnings and the cost of living looks different depending on where you live,” Stooksbury said. “Our goal was to highlight where that gap is widest, giving people a clearer picture of the financial realities facing households across the country.”
These are the cities and states where the living wage most dramatically outpaces media wages.
Cities where cost of living outpaces wages
- New York
- Median annual wage: $61,430
- Living wage: $83,262
- Living wage gap: –$21,832
- Riverside, California
- Median annual wage: $48,400
- Living wage: $67,416
- Living wage gap: -$19,016
- San Diego
- Median annual wage: $58,690
- Living wage: $77,560
- Living wage gap: -$18,870
- Honolulu
- Median annual wage: $57,220
- Living wage: $74,025
- Living wage gap: -$16,805
- Orlando, Florida
- Median annual wage: $46,630
- Living wage: $60,541
- Living wage gap: -$13,911
Other cities to land in the top 10 of the Upgraded Points study are Charleston, South Carolina (-$13,631), Atlanta (-$13,380), Boston (-$13,089), Charlotte, North Carolina (-$12,852), and Miami (-$11,924).
No city fared worse in these metrics than New York City, with a median age shortfall of nearly $22,000.
“These results highlight how costly major metro areas can be, especially in places where housing and other everyday expenses move faster than wages,” Upgraded Points writes.
The inclusion of Orlando, Atlanta and Charlotte are also notable because they aren’t your typical big coastal metropises, but rather in the fast-growing Sun Belt region.
States where cost of living outpaces wages
- Hawaii
- Median annual wage: $53,260
- Living wage: $73,484
- Living wage gap of –$20,224
- California
- Median annual wage: $56,940
- Living wage: $70,707
- Living wage gap of -$13,767
- New York
- Median annual wage: $58,560
- Living wage: $71,444
- Living wage gap: -$12,884
- Georgia
- Median annual wage: $47,020
- Living wage: $57,390
- Living wage gap: -$10,370
- Florida
- Median annual wage: $46,860
- Living wage: $56,148
- Living wage gap of -$9,288
Rounding out the top 10 are some states you might not expect, including Mississippi (-$9,111), Vermont (-$8,716), Virginia (-$8,688), South Carolina (-$6,792), and Oregon (-$6,454).
Hawaii, California and New York state topping the list is no surprise, as they are consistently among the least affordable states in the union, and are each undergoing their own various forms of housing and affordability crises. The inclusion of Florida, Georgia and South Carolina—states experiencing population booms—shows how quickly growth can exacerbate the lack of housing options which in turn increases prices.
Here’s where wages exceed cost of living
North Dakota is the No. 1 in the study’s ranking with about a net-gain of $7,500. North Dakota is known for its relatively low cost of living and high-paying careers in the oil and gas industry—although it’s not typically among the most sought-after places to settle down.
Ohio, Minnesota, Iowa and Michigan are also the best bang-for-your-buck states.
The top cities where wages outpace costs are Spokane, Washington; Dayton, Ohio; Madison, Wisconsin; Toledo, Ohio; and Detroit, Michigan.
Read More: Study shows rent prices drop when cities build more housing
In addition to this study of living expenses and median wages, Upgraded Points also conducted a survey of 2,400 U.S. adults in which they were asked to weigh in on how much Americans need to make in order to feel “comfortable” or “wealthy,” as well as their overall feelings regarding rising costs and stagnant wages.
“Across the U.S., many Americans are navigating a widening gap between what they earn and what it costs to get by,” the study concludes. “Today, every dollar has to work harder.”
To read the responses of that survey, as well as the methodology of the study, click here.
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