Asheville’s cost of living undermines workers’ pay

Up Against 100: The higher the index, the higher the cost of living. In green, each city’s actual average wage varies, but when adjusted by the cities’ cost of living, it begins to show just how far those dollars actually go. In Asheville and Charleston, the numbers on residents’ paychecks don’t go as far as they would in Savannah, Knoxville or Durham. Graph by Lance Wille
Up Against 100: The higher the index, the higher the cost of living. In green, each city’s actual average wage varies, but when adjusted by the cities’ cost of living, it begins to show just how far those dollars actually go. In Asheville and Charleston, the numbers on residents’ paychecks don’t go as far as they would in Savannah, Knoxville or Durham. Graph by Lance Wille

It’s easy to compare hourly wages in different cities and think one town’s workers are better off than another’s.

When a friend in New York City reveals that she makes $19 an hour in a part-time retail job, you, living in Asheville, nearly drop the phone: “You make how much where?”

But it’s not that simple.

An article published last month in Governing magazine examined 191 cities around the country, comparing average hourly wages with each city’s cost of living. The analysis included big cities like New York, Miami and Los Angeles, as well as smaller cities like Asheville. Xpress sifted through the numbers to find out how Asheville compares with the rest of the country.

Governing‘s research was based on the cost of living for each city and the 2014 average hourly earnings for private-sector workers. Earnings were based on figures from the U.S. Department of Labor, and the cost of living was pulled from The Council for Community and Economic Research, which compares the prices of goods and services in specific metro areas with national averages.

To calculate the cost of living, the council averages national prices in several categories, including groceries, housing, utilities and health care.

When factoring in the varying costs from all areas studied, the group derives an overall national average, which is then indexed as 100. Each metropolitan area’s cost of living is then ranked as either above or below that baseline figure.

Asheville comes in at 104.6 on that scale, up from 101.1 in 2010, according to census data, meaning living here is more expensive than the national average, and that disparity is growing. Someone moving to Asheville from Durham (91.7 on the scale), for example, can expect to spend 5.5 percent more on groceries, 38.2 percent more on housing, 21.5 percent more on utilities and 10.5 percent more on health care. (To compare Asheville with other cities around the nation, visit avl.mx/0ui.)

Governing then correlated each city’s cost-of-living score with its average hourly wage, producing a new number that more accurately depicts the reach of an individual’s paycheck in each area studied.

Asheville’s actual average pay rate came in at $21.08 per hour, but when adjusted for our city’s high cost of living, that rate seems more like $20.47. And with hourly pay below the national adjusted average of $22.39, the study suggests Ashevilleans, on average, must spend more of their paychecks on necessities and are therefore less likely to be able to afford nonessential goods and services.

Knoxville, Tenn., closer in size to Asheville than Durham, has an even lower cost of living: 87.1. And with about the same actual average pay ($21.02 to Asheville’s $21.08), Knoxville’s wage increases to $24.05 when adjusted, meaning the average Knoxvillean can buy more for his dollar than his Asheville counterpart.

In fact, Asheville barely escaped inclusion in the list of 20 studied cities with the lowest adjusted wages. Flagstaff, Ariz., ($14.31 an hour) ranked No. 1 on that list; and Tyler, Texas, was No. 20 at $20.34 — a mere 13 cents below Asheville’s figure.

The study found that Southern residents, on average, are far more cost-burdened than people in most other regions of the country, except for the Pacific Coast (due to unavailable data for many cities and notably low wages in Honolulu and Southern California).

“Workers in the southern United States have historically earned lower wages than the rest of the country, a fact some argue is merely a result of lower living expenses,” the Governing article states. “But even after adjusting for the costs of living, average earnings in most Southern metro areas lag behind the rest of the country.”

And it’s not just the South.

Regardless of location, cities with tourism-based economies typically create lower-paying jobs, even though their costs of living often exceed the national average. And where visitors are willing to pay high prices for vacation rentals, developers respond by building costlier housing on limited land. This is especially troubling in a town like Asheville, where, in the midst of a population boom, suitable places to build are becoming rare.

“There are a lot of different factors that play a large role in what the costs of living are,” says Vicki Meath, executive director of local nonprofit Just Economics. “In Asheville … the formula we use is based on the cost of housing. That is really what’s driving a higher cost of living for our area, [more so] than a lot of other parts of the state.

“One of the reasons Just Economics exists is because the cost of housing is so inconsistent with the wages in our area,” she continues. “The cost of housing is growing exponentially, at a rate that I feel is really somewhat scary. So if we’re [hoping] to have a sustainable economy, we’re going to have to rein that in a little bit.”

According to the U.S. Bureau of Labor Statistics, jobs in the leisure and hospitality sector are some of the lowest-paying positions available. An abundance of them drags down an area’s average hourly wage, even as the demand for real estate and rentals drives up housing prices — and thus the cost of living.

But Stephanie Pace Brown, executive director of the Asheville Convention and Visitors Bureau, says tourism often gets an undeserved bad rap. “The data doesn’t tell the whole story,” she says. “Tourism opens doors for other kinds of economic development. … [It] doesn’t preclude people from building wealth [when] values go up, but it does create more barriers to entry.”

In 2012, tourism directly poured $1.5 billion into Buncombe County’s economy while supporting nearly 23,000 jobs — or 14.2 percent of all employment in the Asheville area. And hotel employees here earn 17 percent more on average than the statewide figure — surpassing their counterparts in Charlotte and Durham. Of all workers in Buncombe County making less than $12, only 5 percent work in a hotel.

According to the most recent census findings, 43.3 percent of Ashevilleans have a bachelor’s degree or higher — compared with North Carolina’s 27. 3 percent. And it’s often heard around town that the waiter serving your table may have a master’s in computer science, since local jobs for recent graduates are either scarce, highly competitive or both.

But that’s not tourism’s fault, Brown explains. Take away tourism and, given Asheville’s current population, the number of employable individuals would far outweigh the number of available jobs, she says. Tourism provides entry-level jobs and more mobility to advance than in many other industries. “Just because there is a job waiting tables does not mean the other [more skilled] job would exist if tourism did not. Tourism doesn’t displace other jobs,” says Brown. And without it, “We would have a customer base of 200,000 instead of 9 million.”

That said, however, the Convention and Visitors Bureau often compares Asheville’s tourism statistics with those of Savannah, Ga., and Charleston, S.C., two Southern cities similar to Asheville in both size and mass appeal. But despite those cities’ comparable tourist pull, both fare a little better than Asheville when it comes to paying a living wage. Savannah (91.8) and Charleston (100.7) have slightly lower cost-of-living indices, and their adjusted average hourly wages ($22.72 and $22.48, respectively) top Asheville’s $20.47 and make the cut above the $22.39 national average.

“I certainly think we’re making progress in some aspects, but we need to put some serious attention toward housing — keeping housing affordable and keeping wages in line with the cost of housing,” says Meath. “Asheville is a desirable place to live … [and] our local economy is dependent on a bunch of different factors. We can’t talk about these issues in a silo. We have to talk about them together.”

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About Hayley Benton
Current freelance journalist and artist. Former culture/entertainment reporter at the Asheville Citizen-Times and former news reporter at Mountain Xpress. Also a coffee drinker, bad photographer, teller of stupid jokes and maker-upper of words. I can be reached at hayleyebenton@gmail.com. Follow me @HayleyTweeet

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12 thoughts on “Asheville’s cost of living undermines workers’ pay

  1. Do you have any information on the difference in the cost of living between Boston and WNC?

    “Tillis’ point is that the cost of living in Western NC is lower than Boston, so federally mandating a similar minimum wage in both locations makes no economic or logical sense. The Citizen-Times has now re-framed his position to characterize it as an insult to residents in WNC. This, in turn, has allowed the Hagan campaign to craft its narrative – which is then promulgated by other media. It’s sloppy, at best, and dishonest, at worst.”
    http://www.wwnc.com/onair/pete-kaliner-46655/building-the-tillis-is-offensive-meme-12480609/

    • If you visit http://avl.mx/0ui, it should let you compare any two cities’ cost of living indeces.

      But I looked it up myself and screenshotted the findings for you here: http://i.imgur.com/e0LfX8b.png

      Boston does have a much higher cost of living than Asheville. If you click the first link in the article (the link to the Governing story), and click on the map, you can compare the two’s average hourly earnings and adjusted earnings as well.

      Sorry, I’m currently on mobile so it’s hard to scroll through the map myself and find it for you. Hope that helps!

    • Amy

      I can only give personal experience, but I moved to Asheville from Boston. Rent is MUCH higher in Boston, I was in Somerville, not Boston proper and I was paying $1,300 a month for a 3 room apartment. Heat was about $1,000 a year (oil), though I’m sure this year it would have been much more than that. Utilities were MUCH higher, my average electric bill was $80 a month. Here in Asheville it is $45. The cost of food is higher there too. I’m vegetarian and like Morningstar Farms products at times, in Boston they are about $6 a box, here about $4. Yes, wages are higher in general, but anyone working in the service industry makes about the same as they do here. Kitchen jobs, etc. It’s pretty brutal up there.

      • Claire

        You are part of the problem here in Asheville. People have come from all over the country from a situation like yours and said oh! I will gladly pay $500,000 for a nice house on a 1/2 acre of land!! Because that wouldn’t get half that up north, or in other areas. So, since you willingly will pay more that , it has raised all of our housing costs. And for a resident born here, that is Not a reasonable housing cost.

      • West

        Hell we pay 1000 a month for a crappy 2 bedroom in West Asheville, Bear Creek apts.
        This town has become a joke. After 15 years we are leaving.

  2. J. Schidto

    I’m curious if this $21.08 includes retirees. I know very few people that make more then $15 a hour here. Who here is making $20 an hour? What is this based on, taxes alone? I make $17 an hour and I feel like the 1% in my friend group.

    • Local

      I was also surprised by the “average” hourly wage being so high – I can only assume it’s a simple average which includes everybody, including the astronomical salaries of the CEOs at Mission Hospital and similar. That would skew the “average” quite a bit higher.

      • Dwight Butner

        As a former employer in the hospitality industry I find this topic fairly frustrating. The suggestion that the wages paid by the hospitality industry holds the average wage down is a limited analysis. What keeps the wage average down is the lack of higher paying, high tech jobs which would bring the average up, if they were available. As a native of WNC and longtime Asheville resident, I have watched the local economy for some time. We are in fact an old money, relatively passive economy. The solution to raising the average wages is to attract higher paying, new economy jobs. Something that our Asheville City Government is working hard to attract.

        Rather than condemning what we have, perhaps we should look at the fact that the hospitality industry is producing something that is are rare as hens teeth in some areas. Namely, entry level, working class and lower middle class jobs. While that is not glamorous, I’m sure that the people who take them are competent to decide whether or not to do so. Furthermore, most peoples first job is rarely the best job they will have. There is value to introductory, transitional jobs being available while one is developing their skills, practicing their art or pursuing an education.

    • West

      Yes seems way too high. Most stats use a “median” vs “average”
      I run my own online small business and make close to a “median household income”

      The income per capita is $26,993, which includes all adults and children. The median household income is $42,333.
      That does not match a 20+ hourly wage from this article.

      Most of my friends are fighting for $10hr. It’s a sad fact in asheville

  3. Karen H

    I disagree with the assumption regarding Knoxville, Tn. I have lived in Knoxville for 8 years and have found that most jobs here pay way way below the national average. I have an MBA and can’t buy a job. The National average salary for my degree level should be 79-93k. Knoxville pays 30-36k for the same position. NO! The cost of living is not lower in Knoxville. I moved here from Charlotte and paid less for housing in Charlotte. Knoxville housing is greatly overpriced. Utility cost are very close in cost and often lower in Charlotte. An example I will use is water bill in Charlotte was $25 a month and in Knoxville I pay $46-$50. The tax rate is 9.25% In Knoxville. While there is no state income tax they make up for it in the tax on property and groceries and anything else taxable. I will say that the public school system in Knoxville is better than Charlotte. I will stay until my child graduates (next year) but leaving after that. If you have a degree or an advanced degree -look elsewhere-you will never make a worthwhile salary.

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