How Expensive Cities Hurt Workers

We all know how expensive housing can be in cities such as New York, L.A., San Francisco, or Washington, D.C. But to what extent do those high prices eat away at the wages of workers in those cities? What kinds of workers and residents are hit harder that others?

A recent report from the Bureau of Labor Statistics helps us better understand the real wages and living standards of workers and families across America’s metros, providing detailed data on “regional price parities” (RPPs)—the metro equivalent of purchasing power parity—which look at what workers’ wages can actually buy compared to the national standard. RPPs above 100 indicate that goods and services are more expensive than the national average, while RPPs below 100 indicate that they are less expensive. San Jose, for example, has an RPP of 122, so the wages of its workers fall from an average of $75,770 to $62,107 based on its RPP.