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.”