By Scott Gordon/WisContext
A state government-funded ad campaign aimed at recruiting younger workers to move to Wisconsin from Chicago touts cost of living as a critical advantage.
Indeed, the phrase “cost of living” pops up regularly in discussions about economic development at both the state and local levels, and at the personal level, in families’ discussions about career opportunities and financial futures.
But cost of living isn’t a standardized, hard-and-fast mathematical concept. And looking into how it’s defined and applied to specific places reveals less about empirical economic differences and more about the nuanced and fluid ways in which people make decisions about money, opportunity and lifestyle.
To get the obvious out of the way: No reasonable person can dispute that it’s more affordable, on the whole, to live just about anywhere in Wisconsin than the Chicago area. It’s an economic fact of life that it is more expensive in some geographic areas than others to buy or rent a home, stock up on groceries, get around by car or public transit, pay for basic utilities, obtain child care and healthcare services, and enjoy leisure activities like dining out or live music.
Just about any of cost-of-living calculation will largely rest, and reasonably so, on housing costs. However, there’s no one standard formula for how to use that information to determine cost of living.
“There’s a number of different ways to look at it,” said Matthew Kures, an economist with the University of Wisconsin-Extension’s Center for Community and Economic Development. “Cost of living is typically kind of the market basket of goods that people typically use on a daily basis, but really one of the biggest drivers of cost of living differences is housing costs. When people think of the price of a gallon of milk or the price of a gallon of gasoline, there’s certainly a regional difference between those costs, but the biggest driver is going to be housing costs.”
Cost-of-living calculations play an important role in the discussion Wisconsin is having in its attempts to retain and attract more young workers – which in recent years has been a struggle.
Posted on March 7, 2018