Comparing states isn’t always apples to apples, and the same goes for the value of the dollar in states across the US. In California, a Benjamin is worth approximately $89.
Source: Tax Foundation/City Lab
CityLab published an article featuring this map created by economists at the Tax Foundation. The map demonstrates the actual dollar value for a $100 to each state and based from recent data published by the Bureau of Economic Analysis. The Bureau of Economic Analysis calculates numbers on personal consumption and housing costs to determine the state averages.
While Mississippi is the most affordable, the southern state gives the highest purchasing power rounded down to $115 per Benjamin. California comes with an $89 value, behind New York, Hawaii in second place, and Washington DC in first place as the most expensive rounded up at $85. The discrepancy of the dollar value heats up the heavily debated push for a local minimum wage versus a blanket national minimum wage proposal.
Let’s compare a popular national brand item, as one dozen assorted Krispy Kreme doughnuts. According to Fast Food Menu Prices, a website that estimates prices of national fast food chain products, one dozen Krispy Kreme doughnuts costs $12.05 in Washington, DC and $11.51 in California. In Illinois, where a Benjamin nearly equals $100, it costs $10.25 per dozen. In Mississippi, you pay $8.81 for the same dozen Krispy Kreme doughnuts.
The Tax Foundation also mapped out value of metropolitan statistical areas. With an even more glaring gap, the article reports San Francisco-Oakland-Hayward MSA, comes in at whopping $83.10, more expensive than any of the states’ national averages. It is attributed to land costs with less available land for for many urban areas. In more rural areas, land is cheaper with more supply and, with less zoning restrictions, this results in lower costs.
The power of the dollar in residential real estate market is clearly more evident. In San Francisco, a single-family residence listing at $649,000 can afford you a two bedroom, 1.5 bath, modest row home on a 2,600 square foot lot. The home will also likely spur multiple offers and sell well over asking. In Jackson, Mississippi a single family residence listed at the same price offers you a fully-detached house on a nearly 15,000 square foot lot with four bedrooms and 3.5 bathrooms.
Truth. People sing about leaving their hearts in San Francisco, but they may have failed to mention a big wad of Benjamins were also left behind.