(Nexstar) – Considering moving to a new city for work? Don’t forget to research the cost of living before accepting a new salary.
A new study by Finance Site Bankrate finds that after adjusting for cost of living, the average worker’s purchasing power increased in just a handful of large metros (compared to other cities).
For example, the San Francisco metro area had the highest household income ($127,792) in 2023, according to the U.S. Census Bureau. However, the costs of housing, food, and other staples are high as well, with the average worker gaining purchasing power of 15.4% in most major metros, according to the study.
See the top five metros where the cost of living eats up the largest percentage of workers’ wages, according to Bankrate below.
Adjusted Cost of Living Adjusted Annual Average Average Wage Before Metro Area Annual Average Wage Adjusted Cost of Living Francisco – Oakland Fremont, CA Metro Area $97,460 $82,453 – 15.4% Los Angeles Long Beach – Anaheim, CA Metro Area $73,400 $63,550-13.4% Seattle-Tacoma – Bellevue, WA Metro Area $86,520 $76,566-11.5% New York New York-New York-Jersey City, New York NJ Metro Area $82,050 $72,933-11.1% Metro Area $63,380 $56,691-10.6% (Credit: Bankrate)
Since the cost of living tends to be greater in cities with higher average wages and vice versa, is there a balance where wages can move forward more effectively?
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Bankrate found that after adjusting for cost-of-living average wages, only San Antonio, St. Louis, Charlotte and Detroit can boast increased purchasing power compared to other metros.
Metro Area Annual Average Wage Average Wage Before Cost of Living Adjustment Annual Average Wage Adjusted Average Wage After Cost of Living Adjustment Changes. LOUIS, MO-IL Metro Area $61,910 $64,2893.8% Charlotte-Concord-Gastonia, NC-SC Metro Area $64,4440 $66,4333.1% DETROIT-WARREN-DEARBORN, MI METRO AREA $64,360 $65,6732.0 Metro Area $63,510$ 63,383-0.2% (Credit: Bankrate)
“I don’t want to break down in a sexy city,” Yusuf Benalal, 30, told the Wall Street Journal about his decision to move from Miami to Charlotte. “I want to thrive in a mediocre city.”
A 2024 study by Payroll Provider ADP appears to support Benallal’s decision to avoid cities like Los Angeles, New York, and Chicago for smaller cities that boast active employment, affordable prices, and solid salaries.
ADP researchers looked at 55 U.S. metros and found that Raleigh, North Carolina, had the furthest average pay for four-year graduates when adjusted for cost of living. Austin, Texas. Baltimore; Atlanta; Charlotte, North Carolina.
The biggest jump in purchasing power comes from keeping your salary and moving to a cheaper city, but that’s not always possible, especially when changing companies.
So what should you do with your decision-making process?
Career coach Melissa Fleury recommends consulting a cost of living calculator tailored to your future city to see how your base salary and bonus stack up against other metros . Fleury cautioned that there may be hidden costs, such as transportation, child care and lifestyle costs.
“You need to make sure you like the area and are probably willing to stay there,” New York career counselor and coach Lynn Berger told Bankrate. “If possible, live for a while without financial ties or responsibilities before buying a house or apartment.”
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