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 Oh... The Places You’ll Go! Oh... The Places You’ll Go! Dr. Seuss [6:53]

© 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 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. Supply and Demand Supply and Demand [2:22]

© 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 The four basic laws of supply and demand are: [1] [1] If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity We got it 4 cheap We got it 4 cheap [2:45]

© 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 Supply & demand curve P - price Q - quantity of good S - supply D - demand

© 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 The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D) purchasing power The diagram shows a positive shift in demand from D 1 to D 2, resulting in an increase in price (P) and quantity sold (Q) of the product

© 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 Equilibrium point P - price Q - quantity of good S - supply D - demand P0 - price of market balance A - surplus of demand - when P<P0 B - surplus of supply - when P>P0

© 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 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 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 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 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 Cost-of-living index A cost-of-living index is a theoretical price index that measures relative cost of living over time or regions It is an index that measures differences in the price of goods and services, and allows for substitutions to other items as prices vary Census.Gov – 2010 Cost of Living Index2010 Cost of Living Index

© 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 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 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 Comparing Job Offers Base Salary Dollar amount a person will receive in his/her monthly paycheck before taxes. Based upon supply and demand Fringe Benefits Paid sick time Holidays and vacation time Bonuses Health and life insurance Workman’s compensation Retirement contributions Opportunity for Advancement & Other Work Incentives Raised based on performance Guaranteed pay raise based on longevity Additional perks Relocation allowances Company car Repayment of education loans Stock options Gym membership Flexible hours Merchandise discounts Child care Telecommuting Location and Environment Commute time Affordable housing Low crime rate Good schools Desired climate

© 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 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 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 Cost of Living Equation In order to compare the cost of living in two cities always follow these three steps: Step 1: Assign each city a number One city will be assigned the number one and the other the number two Step 2: Provide the corresponding salaries and index amounts (create the formula) 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 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 Sara’s Job Offers Job Offer 1 – Reno, NV –$35, salary –105.1 Cost of Living Index Job Offer 2 – Anchorage, AK –$40, salary –123.1 Cost of Living Index

© 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 Cost of Living Equations $35, in Reno x = Equivalent Salary in Anchorage $40, in Anchorage x = Equivalent Salary in Reno Option 1 or Option 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 Cost of Living Equations [Reno] $35, x = $40, (Equivalent salary in Anchorage) [Anchorage] $40, x = $34, (Equivalent salary in Reno) Option 1 or Option 2

© 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 Outcome A person earning $35, in Reno must earn $40, in Anchorage to have the same spending power Job offer is $40, in Anchorage (offer under spending power by -$994.29) Or A person earning $40, in Anchorage must earn $34, in Reno to have the same spending power Job offer is $35, in Reno (offer over spending power by ) Job Offer 1 $35, in Reno, NV Job Offer 2 $40, in Anchorage, AK Job Offer 1 $34, in Reno, NV Job Offer 2 $40, in Anchorage, AK

© 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 Reno: $35,000 (job offer) - $34, (spending power) = $ Anchorage: $40, (spending power) - $40, (job offer) = - $ Therefore, the salary offer in Reno is better by $994.29

© 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 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 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 Cost of Living Equations $24, in Denver x = Equivalent salary in Seattle $32, in Seattle x = Equivalent salary in Denver Option 1 or Option 2

© 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 Joe’s Cost of Living Equations $24, x = $34, = Equivalent salary in Seattle $32, x = $22, = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 24 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 Or A person earning $32, in Seattle must earn $22, in Denver to have the same spending power Therefore, the salary offer in Denver is better by $2, ($34, $32,000.00) 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 25 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 26 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 27 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 28 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, in Reno x = Equivalent salary in Anchorage $45, in Anchorage x = Equivalent salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 29 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, x = $46, = Equivalent salary in Anchorage $45, x = $38, = Equivalent salary in Reno Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 30 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 Or A person earning $45, in Anchorage must earn $38, in Reno to have the same spending power Therefore, with the benefits package included, the job offer in Reno is higher 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 31 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 32 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 33 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 $28, in Denver x = Equivalent salary in Seattle $38, in Seattle x = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 34 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 $28, x = $41, = Equivalent salary in Seattle $38, x = $26, = Equivalent salary in Denver Option 1 or Option 2

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 35 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 Or A person earning $38, in Seattle must earn $26, in Denver to have the same spending power Therefore, with the benefits package included, the job offer in Denver is higher Job Offer 1 $28, (with benefits) in Denver, CO Job Offer 2 $38, (with benefits) in Seattle, WA

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 36 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 How to Get a Job: How to Counter a Salary Proposal After a Job Offer Most salary proposals are negotiable and there are tips on how to correctly leverage for a higher amount of money. Negotiate a salary offer with advice on how to get perks such as air travel and a company car using advice from a career adviser in this free video on job guidance. [5:06]

© Family Economics & Financial Education – Revised May 2009 – Career Development Unit – Comparing Job Offers – Slide 37 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) – – cost-of-living-calculator.aspxhttp:// cost-of-living-calculator.aspx – living/rankings_current.jsp [ relative to NYC - 100%] living/rankings_current.jsp

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