Cost of Living

Posted on January 12, 2015 by Greg Chmura

The cost of living is one of many metrics we examine when assisting site selectors in identifying attractive labor markets for relocations or expansions.

The below map displays the Cost of Living Index for each U.S. metropolitan area. The average cost of living for the nation is set to 100; areas with higher cost of living are shown in red (where the index is greater than 100) and areas with lower cost of living are shown in green (where the index is less than 100).

A quick look at the map shows that higher costs of living are generally found on the east and west coasts. Lower cost of living is not uniform in the interior of the country, however. Pockets of above-average cost of living exist in non-coast metros such as Denver, Minneapolis, and Chicago.

For firms looking to move into new regions, cost of living can serve as a quick proxy for the relative wages of workers in a region, but the relationship between wages and the Cost of Living Index is rarely if ever simple. For site selection purposes, occupation wages should be examined in addition to the cost of living, and the relative difference of wages typically varies depending on the nature of the industry and the mix of occupations employed.

This blog reflects Chmura staff assessments and opinions with the information available at the time the blog was written.