Saturday, July 22, 2017

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Less Living for your Dollar: Cost of Living also Drives Migration

People want to live where they can maximize their standard of living.  But it’s not just the high taxes driving residents out of states like California, New York, and New Jersey.

According to Eamon Moniyhan, director of The Cost of Living Project (COLP) in New York, states with the largest population growth are those with a low cost of living, in particular the South and Mountain West states. The reverse is true in the high cost of living Northeastern states — Massacussets, Connecticut, and New Jersey.

According to the U.S. Census, New Jersey has  the second highest median income in the nation at $67,142, but once the cost of living is factored in, that shrinks to $56,147. Not coincidentally, New Jersey has been experiencing a steady loss of residents for lower tax (and lower cost of living) locales such as North Carolina.

As Rutgers economists Joseph Seneca and Richard Hughes find in  “Where Have All the Dollars Gone?”, between 2000 and 2005, over one million people left New Jersey. Among the top ten destination states, some are high tax and high cost of living (New York, California, and Massachusetts). Others are low-tax and/or low cost of living states in the South and West (North Carolina, Virginia, Texas, Georgia, and Florida).

What drives the high cost of living? According to COLP, excessive regulations. This is why the average metro New Yorker’s income doesn’t stretch that far. A person earning $50,789 in Chicago has the same standard of living of someone earning of $100,000 in New York City. For more, read here.