Comparing Job Offers Take Charge of Your Finances Family Economics and Financial Education

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Supply and Demand The availability of jobs and the rate of pay is dependent upon the economic concept of supply and demand. –Supply – the relationship of prices to the quantities of a good or service that sellers are willing to sell at any given point in time. –Demand – the relationship between prices and the corresponding quantities of a good or service individuals are willing to purchase at any given point in time.

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Congratulations! Sara just graduated from college with a teaching degree and received two job offers. Which is the best deal?

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 A.Job Offer 1 –$35, in Reno, NV B.Job Offer 2 –$40, in Anchorage, AK C.Not enough information to decide Which option is best? Which is the better deal?

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Cost of Living Cost of living – includes housing, food, transportation, and other everyday expenses. –Rural communities often have a lower cost of living than urban communities. Index form – rates communities on a scale of and gives an average cost community a rating of –A lower index means a lower cost of living. –A higher index means a higher cost of living.

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Cost of Living Equation Round dollar amounts to two decimal places Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Cost of Living Equation In order to compare the cost of living in two cities always follow these three steps: –Step 1: Assign each cities numbers. One city will be assigned the number one and the other the number two. (First city listed in problem is city 1) –Step 2: Provide the corresponding salaries and index amounts. –Step 3: Complete the math and indicate which city is a better offer and why.

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job Offers Job Offer 1 – Reno, NV (or City 1) –$35, salary –105.1 cost of living index Job Offer 2 – Anchorage, AK (Or City 2) –$40, salary –123.1 cost of living index

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Cost of Living Equations $35,000 × = Equivalent Salary in Anchorage $35,000 x 1.17 = $40, in Anchorage How much was she offered, when comparing the $40, needed to live in Anchorage. If less than your answer, she chooses Reno If more than your answer, she chooses Anchorage.

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job Outcome A person earning $35, in Reno must earn $40, in Anchorage to have the same spending power. She should choose __?___. Job Offer 1 $ 35, in Reno, NV Job Offer 2 $40, in Anchorage, AK

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Joe’s Offers Job Offer 1- Denver, CO –$24, salary –102.9 cost of living index Job Offer 2 - Seattle, WA –$32, salary –148.2 cost of living index

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Cost of Living Equation Round dollar amounts to two decimal places Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Joe’s Cost of Living Equations 24,000 × = $34,

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Joe’s Job Outcome A person earning $24, in Denver must earn $34, in Seattle to have the same spending power. Was Joe offered more or less than $34,565.60, in Seattle? Which job offer would give him more spending power? Job Offer 1 $24, in Denver, CO Job Offer 2 $34, in Seattle, WA

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Benefits Fringe benefits and employer provided services can make a difference: –For example, if a $35, job had 100% of medical insurance coverage valuing $ per month, a person would not have to budget for $4, in medical insurance per year. This would increase the value of his or her salary to $39, –Benefits and services should be included within the salary before calculating the cost of living.

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job including benefit package Round dollar amounts to two decimal places Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job including benefit package Job Offer 1 – Reno, NV –$35, salary + $4, benefits = $39, –105.1 cost of living index Job Offer 2 – Anchorage, AK –$40, salary + $5, benefits = $45, –123.1 cost of living index

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job including benefit package $39,800 × = Equivalent Salary in Anchorage 105.1

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 19 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Sara’s Job Outcome including benefit package A person earning $39, in Reno must earn $46, in Anchorage to have the same spending power. Job Offer 1 $39, (with benefits) in Reno, NV Job Offer 2 $45, (with benefits) in Anchorage, AK

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 20 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Joe’s Job including benefit package Job offer 1 - Denver, CO –$24, salary + $4, benefits =$28, –102.9 cost of living index Job offer 2 - Seattle, WA –$32, salary +$6, benefits = $38, –148.2 cost of living index

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 21 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Cost of Living Equation Round dollar amounts to two decimal places Salary in city 1 x Cost of Living Index of City 2 Cost of Living Index of City 1 = Equivalent Salary in city 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 22 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Joe’s Job Outcome including benefit package A person earning $28, in Denver must earn $41, in Seattle to have the same spending power. Job Offer 1 $28,500.00(with benefits) in Denver, CO Job Offer 2 $38,000.00(with benefits) in Seattle, WA

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 23 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Additional Web sites Web sites available to help calculate salaries and cost of living in various locations – – – $12.95 fee

Questions?