The cost of living varies greatly from state-to-state,influenced by government policies such as taxes, labor law, restrictions on development, and regulations.
These costs impact real people. For example, a young person making minimum wage in Texas ends up with about 43 percent more buying power than a minimum wage earner in New York.
According to the Council for Community and Economic Research’s analysis of population-weighted U.S. Census Bureau metropolitan area cost of living data, from the fourth quarter of 2012 to second quarter of 2013, the cost of living in Texas relative to the rest of the nation dropped from 92 percent of the U.S. average to 91.4 percent of the U.S. average. Texas was the nation’s 10th-least expensive state.
Regional cost of living is rarely discussed in Washington, D.C., but it has a huge effect. For instance, a recent U.S. Census Bureau study looked at how the cost of living and imputed value of government benefits would change the official poverty rate, were such data used. The results were startling. Just looking at the two largest states, California’s poverty rate soared by 7.3 percent to 23.5 percent, the highest in the nation, under the new measure while Texas’ poverty rate dropped 1.3 percent to 16.5 percent. There are proportionately 42 percent more people living in poverty in California than in Texas and the high cost of living driven by government policies has much to do with it.
Since public policy has such a huge impact on cost of living, let’s look at the top 10 most costly states and the 10 most affordable states and see what party runs the state.
Most Costly:
Hawaii – 161.7 percent of the U.S. average
New York – 134.5 percent of the U.S. average
Connecticut – 133.8 percent of the U.S. average
Alaska – 131.1 percent of the U.S. average
New Jersey – 129.5 percent of the U.S. average
California – 128.6 percent of the U.S. average
Rhode Island – 125.8 percent of the U.S. average
Maryland – 122.3 percent of the U.S. average
Massachusetts – 121.2 percent of the U.S. average
New Hampshire – 120.2 percent of the U.S. average
Most Affordable:
Mississippi – 88.7 percent of the U.S. average
Nebraska – 88.9 percent of the U.S. average
Idaho – 89.4 percent of the U.S. average
Tennessee – 89.7 percent of the U.S. average
Indiana – 90.0 percent of the U.S. average
Oklahoma – 90.0 percent of the U.S. average
Kentucky – 90.1 percent of the U.S. average
Arkansas – 91.0 percent of the U.S. average
Iowa – 91.3 percent of the U.S. average
Texas – 91.4 percent of the U.S. average
In the 10 most affordable states, Republicans are in the governor’s mansion in 8 (Arkansas and Kentucky are the exceptions).
In the 10 most expensive states, Democrats are in the governor’s mansion in 8 (New Jersey and Alaska are the exceptions).
In the 10 most affordable states, Republicans control the lower house in 8 (Kentucky and Nebraska excepted, the latter of which is unicameral and non-partisan).
In the 10 most expensive states, Democrats control the lower house in 9 (Alaska is the exception).
In the 10 most affordable states, Republicans control the upper house in 8 (the exceptions are Iowa and Nebraska, which is unicameral and non-partisan).
In the 10 most expensive states, Democrats control the upper house in 7 (the exceptions are Alaska and New Hampshire with New York being split control).
Do big government liberals make things expensive? The pattern would seem to suggest so.
Chuck DeVore, a former California lawmaker, is vice president of policy at the Texas Public Policy Foundation and the author of “The Texas Model: Prosperity in the Lone Star State and Lessons for America.”