Wednesday, October 22, 2014
Inquirer Daily News

Cities with Highest Real Wages Identified

Philadelphia didn’t make the cut, but Trenton, N.J., 33 miles away, is one of 10 U.S. cities that offer the most bang for the working person’s paycheck.
Philadelphia didn’t make the cut, but Trenton, N.J., 33 miles away, is one of 10 U.S. cities that offer the most bang for the working person’s paycheck. iStockphoto

Philadelphia didn’t make the cut, but Trenton, N.J., 33 miles away, is one of 10 U.S. cities that offer the most bang for the working person’s paycheck.

Trenton is one of the cities ranked as the 10 metros with the highest real average wages in a recent study by Arizona State University economist José Lobo.

Richard Florida, writing about the study in The Atlantic CityLab, explains that the amount of money workers make varies substantially across America's cities and metros.

Aside from differences in productivity and compensation, there are considerable differences in costs of living, including rental housing. This is why it may be harder to make ends meet in New York, San Francisco, Boston or Philadelphia, than in Trenton, where Zillow’s estimate of the median rent is $1,278.

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  • Lobo used data from the U.S. Bureau of Economic Analysis (BEA) to calculate a new metric he calls “real average wage per job.” This is based on recent BEA data that tracks the variation in cost of living using so-called Regional Price Parities (RPP), based on expenditures for food, transportation, housing and education.

    The metro with the highest real average wages per capita is Silicon Valley’s San Jose, where real average wages top $75,000. The Bridgeport-Stamford metro in Connecticut was second, posting real average wages per capita of $64,321. The San Francisco-Oakland-Hayward metro came in third, at $60,562, followed by California-Lexington Park, Md., $59,130; Durham-Chapel Hill, N.C., $58,166; Midland, Texas, $58,153; Houston-The Woodlands-Sugar Land, Texas, $57,461; Midland, Mich., $57,328; Trenton, $55,317 and Boston-Cambridge-Newton, Mass., $55,317.

    Taking living costs into account does clearly normalize some of the big differences between coastal metros around the Bay Area, Greater L.A., and across the Boston-New York-Washington corridor, the study’s author noted. That’s also true in college towns like Boulder and Madison, Wis., the home of the University of Wisconsin, where the median rent is $1,393, according to Zillow.

    Nora Tooher Zillow.com