Living in New York is expensive. If you earn $100,000 in the city your income is only worth $88,000 in spending power, while the same amount of yearly income is worth $114,116 in South Dakota and $111,230 in Oklahoma. It’s no secret that being landlocked can save you money on your living expenses and now the team at The Tax Foundation shows the disparity in money’s value throughout the United States.
The foundation took $100 in American currency and compared it against the value of money all across the country. For example, $100 in US currency is worth just $88 in New York and $89.05 in California. That same $100 average is worth $102.99 in Arizona.
The agency collected its information from Data released by the Bureau of Economic Analysis, which reveals a wide disparity in the value of a dollar from state to state.
The state with the lowest cost of living is Mississippi, where $100 is worth $115.21. The highest cost of living, in contrast, is in Washington, D.C., where $100 is only worth $84.96. That’s a 36% difference in the purchasing power of the same unit of currency.
Want to live in a state with the highest value placed on every $100 earned? Here are the top five states:
Mississippi – $115.21
Arkansas – $114.29
South Dakota – $114.21
Alabama – $114.03
West Virginia – $113.12
Your $100 is worth the least amount in these five states:
Hawaii – $86.06
New York – $86.73
New Jersey – $87.34
California – $89.05
The Tax Foundation points out that this data shows that people earning less in land-locked states may actually have more earning power. For example, living in Nebraska will earn you a lower net income, but allow you to purchase more products and services with your earned income than people living in California.
The Tax Foundation believes that this type of information should be used when forming political policies regarding economics:
Many policies – like minimum wage, public benefits, and tax brackets – are denominated in dollars. But with different price levels in each state, the amounts aren’t equivalent in purchasing power. This has some unexpected consequences; people in high-price-level states like New Jersey will often pay more in federal taxes without feeling particularly rich.