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For jobseekers who wonder if they might earn higher wages by moving to a different area of the country, an important consideration is the relative value of wages earned. Even if wages in a new area are higher, a wage earner’s purchasing power will decrease if the cost of living in the new area offsets the higher wage.1 When actual wages are adjusted for regional prices, the resulting figures offer data users a more accurate representation of purchasing power for cross-area comparisons. This article will discuss how regional differences affect purchasing power in general, how price-adjusted wages are used to compare purchasing power across areas and occupations, and how specific occupations are affected by regional prices and employment concentrations in different areas.

Purchasing power: using wage statistics with regional price parities to create a standard for comparing wages across U.S. areas