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 v 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.
In Oregon, the true purchasing power of a dollar is about $0.98. Cost of living in a given area is closely tied to wages in the area. Generally, in places where incomes are higher, the cost of goods and services is also higher, and a dollar does not go as far. In Oregon, annual income per capita stands at $56,765 — compared to $59,729 nationwide.
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 income — and vice-versa. Oregon’s cost of living- adjusted personal income amounts to $55,516, far lower than the comparable national income.
Cost of living measures take into consideration housing costs, which for most Americans account for a substantial share of living expenses. As a result, areas where a dollar has lower than average purchasing power, home prices tend to be relatively high — and in areas where a dollar goes further than average, housing tends to be cheaper. The typical home in Oregon is worth $354,600. Meanwhile, the median home value across the U.S. as a whole stands at $240,500.
24/7 Wall St. reviewed data on regional price parity in 2019 from the Bureau of Economic Analysis to determine the value of a dollar in each state. We calculated the value of a dollar by dividing 100 (which represents the base value of $1.00) by every state’s relative price parity figure. We also reviewed the BEA’s per capita personal income data for all states in 2020. To arrive at the effective personal income value for every state, we divided the 2020 per-capita-personal income figure by the 2019 regional price parity value. Median home values came from the 2019 U.S. Census Bureau’s American Community Survey and are one-year estimates. This is the value of a dollar in every state.
|State||Value of a dollar ($)||Personal annual income ($)||Cost of living adjusted income ($)||Median home value ($)|