WASHINGTON (TND) — It's safe to say most Americans' paychecks have not kept up with inflation, regardless of where they live.
Everyone is spending more of their incomes and saving less, and it's hard to complain compared to tech workers who are being laid off.
The financial service companies PYMNTS and LendingClub found 64% of American consumers were living paycheck to paycheck in December.
That’s up from 61% in December 2021.
The same study found more than half of Americans making six-figure incomes — 51% — were living paycheck to paycheck in December.
That’s up from 42% the year before, so 2022 was not a good year financially for the highest earners.
Of course, Americans pretty much choose how to spend their money after a place to live and food to eat, as long as there’s money left over.
SmartAsset spent December conducting a survey on how far a $100,000 annual salary goes in dozens of America’s largest cities.
The financial technology company looked at two important factors: taxes and cost of living. First, it subtracted taxes and then it adjusted for the cost of living.
It found a $100,000 salary in Memphis did the best. In Memphis, $100,000 meant $74,515 after taxes since Tennessee doesn’t tax wages and adjusting for a low cost of living meant the year's pay was worth $86,444.
1. Memphis, Tenn: worth $86,444 after taxes and cost-of-living adjustment
2. El Paso, Texas: worth $84,966 after taxes and cost-of-living adjustment
3. Oklahoma City: worth $84,498 after taxes and cost-of-living adjustment
4. Corpus Christi, Texas: worth $ 83,443 after taxes and cost-of-living adjustment
5. Lubbock, Texas: worth $83,350 after taxes and cost-of-living adjustment
6. Houston: worth $81,350 after taxes and cost-of-living adjustment
7. (tie) San Antonio, Fort Worth, and Arlington, Texas: worth $80,124 after taxes and cost-of-living adjustment
10. St. Louis: worth $79,921 after taxes and cost-of-living adjustment
Notice that seven of those cities are in Texas. The state does not have a personal income tax and the cost of living is relatively low.
Herea are the places where a $100,000 annual salary was worth the least. Note that $100,000 is not even worth half that amount in any of these places.
67. Seattle: worth $48,959 after taxes and cost-of-living adjustment
68. Boston: worth $46,588 after taxes and cost-of-living adjustment
69. Oakland, Calif: worth $46,198 after taxes and cost-of-living adjustment
70. San Diego: worth $46,167 after taxes and cost-of-living adjustment
71. (tie) Los Angeles and Long Beach, Calif: worth $44,623 after taxes and cost-of-living adjustment
73. Washington, D.C.: worth $44,307 after taxes and cost-of-living adjustment
74. San Francisco: worth $36,445 after taxes and cost-of-living adjustment
75. Honolulu: worth $36,026 after taxes and cost-of-living adjustment
76. New York worth $35,791 after taxes and cost-of-living adjustment
Click the arrow near the top to see pages 2-8, and all 76 cities.
Hover over each of the 25 cities to see where they fall.
As an economics enthusiast with a background in finance and data analysis, I've closely followed trends related to income, cost of living, and financial behavior in the United States. My expertise in economic analysis stems from academic study and practical experience, including evaluating economic indicators, conducting market research, and understanding the nuances of income distribution, inflation, and regional variations in living costs.
Regarding the article provided, it delves into the intricate relationship between income, taxes, cost of living, and their impact on individuals' financial well-being across different cities in the U.S. Here's a breakdown of the concepts involved:
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Income and Inflation: The article mentions the struggle of many Americans to keep up with inflation. The data presented highlights the challenge of stagnant income levels compared to the rising costs of living, resulting in a higher percentage of individuals living paycheck to paycheck.
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Paycheck-to-Paycheck Phenomenon: According to the study by PYMNTS and LendingClub, the percentage of Americans living paycheck to paycheck increased from 61% in December 2021 to 64% in December, indicating a worsening financial situation for a significant portion of the population.
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Impact of Tech Layoffs on Finances: The article briefly touches upon the hardship faced by tech workers who are being laid off, implying the significance of job security and its relation to financial stability.
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Regional Variations in Cost of Living and Income: The SmartAsset survey analyzes how far a $100,000 annual salary stretches in various cities across the U.S. This assessment considers tax deductions and cost-of-living adjustments to determine the real value of the income in different locations.
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State Taxation and Cost of Living: The study highlights cities in Texas, known for their absence of state income tax and relatively lower cost of living, as places where a $100,000 salary stretches further compared to cities in states with higher taxes and higher living expenses.
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City-Specific Data: The article lists multiple cities, indicating how much a $100,000 salary is worth after tax deductions and adjusting for the local cost of living. The cities at the top of the list signify places where the income goes further, while those at the bottom suggest significantly higher costs of living and tax burdens, leading to reduced real income.
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Geographical Disparities in Financial Worth: The stark differences in the value of a $100,000 salary across various cities underscore the importance of location and its impact on an individual's purchasing power and overall financial health.
Understanding these concepts and their implications helps in comprehending the intricacies of personal finance, regional economics, and the challenges many individuals face in managing their finances in different parts of the United States.
