Linda Poon is an assistant editor at CityLab covering science and urban technology, including smart cities and climate change. She previously covered global health and development for NPR’s Goats and Soda blog.
That crisp Benjamin only buys you $85 worth of stuff in Washington, D.C.
What can you buy with $100?
That depends on where you are. Using recently published data from the Bureau of Economic Analysis, economists at the Tax Foundation put together two maps showing just how much $100 is worth in each state and in different metros.
A crisp Benjamin has the most value in Mississippi and Arkansas, where it will buy you roughly $115 worth of stuff. But in Washington, D.C., where the cost of living is one of the most expensive in the U.S., $100 is worth less than $85 ($84.96, to be exact). The value of $100 is closer to the national standard in Vermont and Illinois.
That’s what called purchasing power, says economist Alan Cole, who helped make the maps. It varies within states, and particularly between urban and non-metropolitan areas.
In the second, interactive map above, bright yellow indicates places where purchasing power is low; those areas are commonly large cities, where land and housing come at a hefty cost. But not all cities are expensive to live in. Compared to D.C., it’s relatively cheaper to live in Richmond, Va., where $100 is worth around $103. (The difference in the cost of living in urban areas is in part the result of relaxed zoning restrictions and the amount of land available, says Cole.)
Overall, just because a city boasts high average incomes, “it may not translate to a higher standard of living,” Cole says. That’s actually one reason for caution on instituting a national minimum wage. For example, despite the fact the the average income in Mississippi is roughly $10,000 less than that in San Francisco, purchasing power in Mississippi communities is nearly 45 percent greater. This is why some economists have argued for local minimum wages rather than a single national rate.
So if you’re ever in San Francisco and find yourself shelling out $4 for a slice of toast, that’s partly because the world has gone mad, but also because your $100 is only worth $83.13.