Federal law stipulates that American workers must be compensated at least $7.25 per hour in any occupation, no matter where they live. While the minimum wage is intended to ensure a certain standard of living for members of the workforce, it ignores substantial variations in cost of living across the country. In some states, a dollar goes much further than in others.
Using regional price parity, an approximation of the average price of goods and services in a certain area compared to average prices nationwide, 24/7 Wall St. calculated the value of a dollar in every state.
Cost of living in a given area is closely tied to wages in the area. Generally, in places where incomes are higher, goods and services also cost more. For example, in New Jersey, per capita income is about $75,000, or about $15,500 more than the national average. Partially as a result, based on purchasing power, a dollar is only worth about 84 cents in the Garden State.
It is important to note, however, that even when accounting for the reduced purchasing power of a dollar in states with the highest incomes, residents of these states still tend to have higher than average incomes. In nine of the 10 states where a dollar is worth the least, cost of living-adjusted incomes are still higher than the national average of $59,729. Here is a look at the income it takes to be considered rich in every state.
For most Americans, housing costs account for a substantial share of living expenses. As a result, areas where a dollar has lower than average purchasing power, housing tends to be relatively expensive — and in areas where a dollar goes further than average, housing tends to be cheaper. Here is a look at the cost of a typical home in every state.