Los Angeles and Cincinnati will be playing to determine the champion of American football in the biggest US sporting event of the year this weekend. Who will win the big game? AIRINC can confidently say we have absolutely no idea (at least not at the time of publishing). What we at AIRINC do know is which of these two cities is more expensive to live in, and by how much.
You may have already guessed that LA is more expensive. But when it comes to determining employee compensation, you likely want a more precise understanding of how much more expensive cost of living is between two cities. Whether you are relocating employees to a new city, setting compensation levels within a country, or your workforce is shifting to remote, trustworthy data is the key to being confident that compensation is providing the employee experience you want it to, regardless of where employees are working.
We ran a calculation using AIRINC’s Salary Evaluation Tool, comparing the costs of housing, goods & services, and taxes in LA and Cincinnati. This holistic approach of combining these cost elements mirrors how employees are paid and how they spend. Based on our data*, an employee would need to net 28.2% more income, and gross 32.3% more in Los Angeles than they did in Cincinnati.
The primary factor behind these differences is the cost of housing in LA, which is nearly double (96.1% more expensive) the costs in Cincinnati. Goods & services are 6.5% more expensive, adding to the cost differences. The Salary Evaluation also considered taxes, including the different state taxes in Ohio and California, as well as taxes specific to Cincinnati.
So with this data, you now know with confidence how much more expensive LA is than Cincinnati, and why. The general knowledge of LA being an expensive city has been upgraded to a specific and tangible amount, which is a much sturdier foundation to base employee compensation decisions on.
*The calculation was done using a typical salary and family size, individual comparisons can differ when salary and/or family size are adjusted
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