Even if most community members are working, the jobs they hold may not pay them enough to escape poverty or offer prospects for advancement. Ideally, work should be both financially and personally rewarding while allowing workers to meet their family needs; in other words, they need access to jobs paying a living wage. Although many different attributes of a job can contribute to mobility, jobs that offer higher earnings tend to also offer employer benefits such as paid time off and health and pension benefits, and workers in better-paying jobs tend to have more stable employment. Further, children in families with higher-earning parents tend to be in better health and on better developmental trajectories than children with lower-earning parents. Earnings that equal or exceed the cost of a family’s basic needs for food, clothing, shelter, child care, health care, and transportation are an important threshold for predicting economic and social mobility.

Metric: Ratio of pay on the average job to the cost of living

This metric shows what a typical job pays relative to the cost of living in a particular area. The metric is computed by dividing the average weekly earnings across all jobs in an area by the cost of meeting a family of three’s (one parent and two children) basic expenses in that area.

Validity: Employer-reported data on wages paid are a reliable indicator of what jobs pay, and the metric is based on data collected and disseminated by BLS. Data on what it costs to meet basic expenses requires detailed studies of the cost of food, clothing, shelter, health care, and work-related expenses for each jurisdiction. We rely on the work of well-regarded scholars at the Massachusetts Institute of Technology (MIT) to obtain estimates of the local cost of living.

Availability: Data on wages are available quarterly from the BLS’s Quarterly Census of Employment and Wages, and estimates of the cost of meeting a family’s basic needs, referred to as a living wage, are available annually from MIT.

Frequency: New data for the metric are available annually.

Geography: Data on wages are available at the county and metropolitan levels. Data on living wages are available at the county level.

Consistency: Information on quarterly wages is collected consistently by the BLS. MIT uses a consistent methodology to compute living wages by county.

Subgroups: The data cannot be disaggregated by demographics because they describe jobs rather than the people in them, but we can disaggregate by industry type.

Limitations: The metric can only be computed for the 365 largest counties and cannot be disaggregated by subgroups. The metric relies on MIT’s computations of “living wages.”