When it comes to our jobs, we all want to make a lot of money. (Although making more money has one significant drawback, a study finds.) But it’s not about what you need do to get ahead on the pay scale. Instead, getting paid more may depend on where you live.
TV politico, “House of Card‘s” Frank Underwood said it best: “It’s all about location, location, location. The closer you are to the source, the higher your property value.” While Underwood was referring to gaining power, the same principle applies to your annual salary: location is key.
In fact, a recent study looked at the average American salary in the U.S. to help you determine how likely you are to have a healthy financial outlook. But economists pointed out that a higher salary doesn’t equate to a lower cost of living. In other words, you might be spending more of your paycheck just to survive. That’s because the cost of living and salary are not always correlated. In other words they don’t always match up.
It’s no surprise that people in the Northeast bring home a lot more money every year than their counterparts in the south. New Jersey, Washington, D.C., Maryland, and Virginia are among the top ten states where people earn the most. One of the likely reasons is that the federal government is on the east coast. (See, it all comes back to power.)
Expect to bring home about $69,000 a year in D.C. It’s next door neighbor, Maryland, is number one on the salary leader board since employees bring home just over $74,000 a year. But before you pack your bags and head for the seat of power in this country, know that you’ll also spend more of your paycheck just to live there.
The opposite is true in Florida, which falls toward the lower third of the pay scale. The average salary is about $49,000 per year, making it less expensive than living in the north. Siri Terjesen, associate professor, Department of Management, American University, Washington, D.C. points out that the cost of living in, say, Tampa, is 41 percent cheaper than in D.C. The salaries in Tampa are also 12.8 percent less, she says, according to data from the Bureau of Labor Statistics. “That means that you actually get a little more bang for your buck in a city like Tampa as compared to Washington, D.C.,” Terjesen says.
And even though D.C. ranks high on the list of top paying states, there are some occupations where it pays to work elsewhere. For instance, Terjsen says a surgeon in Akron, Ohio makes about $249,300, about $7,000 more than a surgeon in D.C.
“The higher salary for physicians are often in places where no one wants to live so they have to pay more to attract physicians to live there,” Terjesen explains.
In this case, a popular city like D.C. has a greater supply of surgeons willing and wanting to work there. As a result, they may make less. (That is unless you want to work for NASA where you might bring home a six-figure salary.)
One final piece of advice: Consider working for yourself. Whether you make more or make less, you’ll do in on your terms. (You may turn your favorite hobby into a career.)
Before you start searching for apartments in a Northeast city, remember there’s always going to be a trade off between a higher salary and daily living expenses. You simply need to find your sweet spot.
|State||Median Household Income|
|9. District of Columbia||$69,235|
|30. New Hampshire||$65,986|
|31. New Jersey||$72,062|
|32. New Mexico||$44,968|
|33. New York||$58,687|
|34. North Carolina||$46,693|
|35. North Dakota||$55,579|
|40. Rhode Island||$56,423|
|41. South Carolina||$45,033|
|42. South Dakota||$50,338|
|49. West Virginia||$41,576|