It has been said that a picture is worth a thousand words. One can attempt to describe Yosemite Valley verbally, but other than being there, a photograph will better convey the true beauty of this treasured National Park.
Not to shortchange poets or literary masters, visual evidence is often superior. In a courtroom or in politics, graphic representations are more persuasive. This is frequently the case when presenting financial data,which is why tax and budget wonks are fans of the Tax Foundation.
When comparing data among the 50 states, the Tax Foundation will overlay a map of the United States with various data points attached to each state. This makes comparisons easy to understand. For example, this column recently noted how each state ranks in “tax competitiveness.” Not surprisingly, California ranked 48th out of 50.
A few weeks ago, the Tax Foundation published a report, along with a map of the United States, that graphically illustrates the relative value of $100 in metropolitan areas adjusted for regional purchasing power. The map and the data therein reveal in easy to understand manner how punishing California’s cost of living is.
The United States Bureau of Labor Statistics provides the definitive conclusion of where California lies in the state by state comparison of cost of living: “California has the highest cost of living in the country — 12.6% higher than the national average. And the primary driver is housing costs, especially in metropolitan areas like San Francisco and Los Angeles.”
Informing voters that the cost of living in California is over 12% higher than average is no doubt useful. But the most recent Tax Foundation map showing the relative value of $100 provides a stark reminder of how punishing California’s high cost of living really is.
In fact, of all the metropolitan statistical areas (MSAs) in the United States, the four where $100 is worth the least are in California. They are San Francisco-Oakland-Berkeley ($100 is worth $84.58), Los Angeles-Long Beach-Anaheim ($86.61), Santa Maria-Santa Barbara ($88.12), and Oxnard-Thousand Oaks-Ventura ($88.13).
While the Tax Foundation map provides the contrast by metropolitan area, another source aggregates the value of $100 by state. The Visualize Capitalist map is based on publicly available federal datasets such as those from the U.S. Bureau of Labor Statistics, the U.S. Bureau of Economic Affairs, and the U.S. Census American Consumer Survey to do the calculations. The study notes that, “In Arkansas, $100 actually goes much further than normal, providing $113.49 of real purchasing power. In California it’s the opposite case, where a hundred-dollar bill is only really worth $87.42. In the case of California and other expensive states, purchasing power is eroded away by the high cost of living, local taxes, and other factors that prevent you from making the most of your money.”
The upshot is that, in the words of Marshall McLuhan, “The medium is the message.” That is, the form of communication (the medium) shapes society and human interaction more profoundly than the actual content (the message). U.S. Congressman Tom McClintock likes to point out that data poorly presented is ineffective even when accurate. He derides “MEGO” (My Eyes Glaze Over) numbers and asserts that it is better to talk about how a law impacts the average family of four rather than how many billions it might cost.
It is one thing to tell your neighbor that California’s cost is living is 12% higher than average. But it might be better just to show him the map.