The personal income gap that exists in this country was exposed in a new study, which revealed how much $100 was worth in each state.
How much is $100 worth to you? This is a question that widely varies by the individual. To one person, it could be a little extra spending money, while someone else might view it as absolutely crucial to their existence. The bottom line is that the money has value, and as with people the Tax Foundation found that the value of $100 even varies by the individual’s geographic location. We’re not talking about how those people spend that $100, but how much that $100 will actually get the individual in their given location. This all stems from a personal income gap study, which have become more and more commonplace.
This study of economic value was conducted by the Bureau of Economic Analysis and has been tracking this information for two years now. This being the second year, which the study was published, the results were taken a little more seriously, and were viewed a little more stringently. This analysis which shows longevity of the dollar in each state, also shows how much richer, or poorer a community would be when you consider the real value of the money being exchanged.
For example, we know without any thought at all that our money is worth what it says on the face. However, there is a micro exchange happening on a smaller scale all around the country. For example, in places like Mississippi, Arkansas, South Dakota, and Alabama, the value of the dollar, or the value of $100 is actually $114.03 and more. It tops out in Mississippi where the value of $100 is $115.21. That means for those who live in these states, they are theoretically 14-15% wealthier than their actually money would suggest.
However, in a world of averages this study had to bottom out someplace. The places where the dollar went the least far were places like Hawaii, New York, and California, as well as the District of Columbia. Should this come as a surprise to anyone? No, it should not. However, the move itself is interesting because it shows what the real value of $100 is throughout the country and what kind of discrepancy there is.
The entire concept though is complicated by the fact that salaries are higher in different places for the same job. In other words, this is what economists call a differential. Employers pay more for the same work to compensate for a higher cost of living. This though isn’t the case in every state. Some places have higher wages and earnings, but lower cost of goods. In places like this, North Dakota is a prime example, the cost of living is low – but the value of the dollar is then propelled forward because of it.
It’s an interesting conversation, and one that stems from the entire debate on wage gaps. There is something significant to be said for how much work there is to be done on that front. Raising wages won’t simply fix the problem, as this study revealed, it matters more what the dollar is actually worth and how far it will go.