The higher pay offered in Northern Virginia sometimes leaves young people so starry-eyed that they fail to see how a significantly lower salary in the Roanoke region could leave them with more money to spend.
During an economic summit Thursday in Roanoke, Alice Kassens, a professor of economics at Roanoke College, said many young professionals are swayed to choose high-dollar jobs in Northern Virginia because they do not consider living costs.
According to 2013, a person making $50,000 after taxes in Northern Virginia could afford the same lifestyle in the Roanoke region for about $32,000 after taxes.
The council’s latest numbers, tied to costs information collected during the first quarter of 2014, show that the Roanoke Metropolitan Area has the lowest cost of living among Virginia’s MSAs. The Roanoke MSA includes the cities of Roanoke and Salem and the counties of Botetourt, Craig and Franklin.
The low cost of living is good news for economic developers and businesses looking to recruit talent — especially young talent. But young professionals sometimes need to be schooled about the advantages of a lower cost of living, said Beth Doughty, executive director of the Roanoke Regional Partnership, an economic development organization.
Doughty said the partnership’s website features a calculator tied to data from the Council for Community and Economic Research that shows what salary would be necessary in other cities to pay for an equivalent lifestyle in the Roanoke metro area.
“That helps demonstrate that your dollar goes further here,” Doughty said. “It’s an argument that appeals more to employers than it does to talent. Intellectually, it is defensible, but talent has a hard time thinking rationally to compare numbers. Thus, employers have to do some explaining.”
Doughty said the partnership touts the region’s low cost of living in presentations to businesses considering locating or expanding regionally.
Having some disposable income can be important to young professionals who want to meet friends for music events, sample craft breweries and explore the region’s many opportunities for outdoor recreation.
“Rarely is it one factor that makes or breaks a person’s decision about an area, rather a combination of factors, like finding like-minded friends who enjoy the same activities as you,” she said. “The partnership has done a great job of packaging these amenities as part of their marketing strategy. It’s making a difference.”
The Council for Community and Economic Research examines living costs that include groceries, housing, utilities, transportation, health care and miscellaneous goods and services. The average for all areas equals 100 and the index for each is read as a percentage of the average for all places. The focus is on the after-tax cost of living for a professional/managerial standard of living.
Specifically, data for the first quarter of 2014 showed that the Roanoke metro’s composite index was 91.6, compared with a composite index in a Northern Virginia metro of 139.6 and a Charlottesville metro composite index of 102.4. The Blacksburg-Christiansburg-Radford metro’s index was 98.
The cost of living index is based on pricing information collected quarterly by chambers of commerce, economic development organizations and university applied economic centers in each urban area. The Roanoke Regional Partnership’s staff collects the pricing particulars regionally, determining, for example, the per pound price of a T-bone steak or 80 percent lean ground beef.