Lafayette’s relatively cheap cost of living is touted as a big selling point in attracting businesses to our market, and so are the area’s low labor costs.
But that doesn’t necessarily translate to Lafayette being affordable or an easy place to get by.
I’ve long heard complaints that the wages paid in Lafayette don’t match our community’s cost of living, but that usually came in the form of anecdotes. And after perusing some economic data, I ran across figures that back up those complaints.
In short, when you compare average hourly wages for metro Lafayette with its cost of living index, you get a pretty big gap. Here’s how that breaks down:
The average hourly wages data comes from the federal government’s Bureau of Labor Statistics, while the cost of living data comes from LEDA through the Council for Community and Economic Research’s Cost of Living Index.
What you’ll see here is that while Lafayette’s cost of living is almost 11% lower than the national average, our hourly wages are more than 22% lower than the national average. The entire state does poorly on this measure, too.
This is problematic for two reasons. One, it suggests that people in our community really are having trouble making ends meet. Two, it harms our economic competitiveness as it relates to being able to retain our best and brightest.
For example, in Houston, average hourly wages are 1.8% higher than the national average, while the cost of living there is 4.6% lower. So, on average, if you move to Houston you’ll make more money from your job while spending less money on your living expenses.
There is some fuzziness in these datasets. While the average hourly wages compares broad categories of industries, it doesn’t take into account the varying ratios of different, specific job types.
So, for instance, the “arts, design, entertainment, sports, and media” category may be skewed in Houston’s favor because it has professional sports teams with players making multi-million-dollar salaries.
Also, the cost of living data LEDA uses only accounts for the cost of white collar housing and doesn’t account for the relative cost of lower income housing.
Even still, this data does point to an economic elephant in Lafayette’s room — that while our cost of living may be low, it doesn’t mean a whole lot if you don’t make enough to afford it.