11/29/2005

Greater Median Income Reported in the East

Many of us are going to be graduating soon and looking for jobs to pay for the last four years of debt acquired to obtain our bachelor degrees. According to the census data released last Tuesday, the highest median incomes were recorded in the eastern states consisting of New Jersey, Maryland, Massachusetts and New Hampshire. The median income in these areas is above $56,000 compared to the national average of $43,000. The states reporting the lowest median income are West Virginia, Louisiana, Mississippi, Montana and Arkansas. One thought that comes to mind is how large of a role does the cost of living play in the east, as I have seen in areas such as California and New York; the wages are not equal to the increasing costs of living. Although, I know in these areas the cost of living may influence the median income to somewhat compensate for the costs. Would this be the reason the median income is higher or would it be the fact that people are merely compensated more for their performance?

2 comments:

Elijah said...

I wouldn't say that people on the East coast are getting paid more becuase of the work they do, I think that it would have to be the fact that the cost of living is higher. There are good business people everywhere so we can't say that those who have higher wages are better at what they do. Personally, I would rather live in Montana making $40000 than in New York making $60000. I just think that where you live determines your income more than we know.

Dr. Tufte said...

There is arbitrage in standards of living. If people can make more with a particular skill in a particular area - in real terms - they will move there.

The fact that we don't see, say, doctors or janitors emmigrating on net to those states tells us that this is compensation for a higher cost of living.