With unemployment at over a decade low, wages at all-time highs, and poverty on the decline, the U.S. economy is flourishing — or so it would seem. For Americans struggling financially it can be difficult to feel encouraged by such optimistic reports. It is a common complaint among ordinary Americans and economists alike: economic measures might be indicative of overall economic performance but rarely connect to the lived experiences of Americans.
For example, while the federal minimum wage is $7.25 an hour, most agree this is not a livable wage. The Economic Policy Institute, a non profit think tank, calculated the income families need to secure a modest, yet adequate standard of living in counties and metro areas across the United States. Americans entering the workforce or starting a family have thousands of cities to choose from — and some are more expensive places than others.
In order to illustrate what it looks like to live in the most and least expensive places, 24/7 Wall St. reviewed monthly living expenses from EPI’s family budget calculator in the most expensive metro areas based on the Bureau of Economic Analysis’ regional price parities. According to the EPI, compared with federal measures of poverty, its family budgets provide a more accurate and complete measure of economic security in America.
In an email to 24/7 Wall St., EPI research assistant Zane Mokhiber explained, “Wherever housing and childcare is expensive, cities are expensive, and vice versa.” By contrast, food, transportation, and health care costs tend to be relatively uniform across the the nation’s major cities.
In all of the 25 cities where goods and services are most expensive — with the exception of the Riverside, California, metro area — average monthly housing costs for a family of four are $1,200 or higher. Childcare costs for families living in these cities average between $1,000 and nearly $3,000 per month. In 10 of the cities on this list, monthly childcare costs exceed housing expenses.
As Mokhiber noted, a high cost of living is not the same as low affordability, and it is important to measure living costs against income. While not universally the case, residents of the most expensive cities tend to have higher incomes.