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Comparing Job Offers 1.1.3
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
1.1.3.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
1.1.3.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
1.1.3.G1
A. Job Offer 1
– $35,000.00 in Reno, NV
B. Job Offer 2
– $40,000.00 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
1.1.3.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
100.0 and gives an average cost community a
rating of 100.0.
–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
1.1.3.G1
Comparing Job Offers
• In groups of 3-4 participants brainstorm examples for each of the
following categories:
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 7
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.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 8
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.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.
– 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 9
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.G1
Sara’s Job Offers
• Job Offer 1 – Reno, NV
– $35,000.00 salary
– 105.1 cost of living index
• Job Offer 2 – Anchorage, AK
– $40,000.00 salary
– 123.1 cost of living index
© 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
1.1.3.G1
Sara’s Cost of Living
Equations
$35,000.00 in Reno x 123.1
105.1 = Equivalent Salary in Anchorage
$40,000.00 in Anchorage x 105.1
123.1 = Equivalent Salary in Reno
Option 1 or Option 2
© 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
1.1.3.G1
Sara’s Cost of Living
Equations
$35,000.00 x 1.1712654 =
$40,994.29 = Equivalent salary in Anchorage
$40,000.00 x .8537774 =
$34,151.35 = Equivalent salary in Reno
Option 1 or Option 2
© 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
1.1.3.G1
Sara’s Job Outcome
• A person earning $35,000.00 in Reno must earn $40,994.29 in
Anchorage to have the same spending power.
– Or
• A person earning $40,000.00 in Anchorage must earn
$34,151.35 in Reno to have the same spending power.
• Therefore, the salary offer in Reno is better by $994.29
($40,994.29 - $40,000.00).
Job Offer 1
$ 35,000.00 in Reno, NV
Job Offer 2
$40,994.29 in Anchorage, AK
© 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
1.1.3.G1
Joe’s Offers
• Job Offer 1- Denver, CO
– $24,000.00 salary
– 102.9 cost of living index
• Job Offer 2 - Seattle, WA
– $32,000.00 salary
– 148.2 cost of living index
© 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
1.1.3.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 15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.G1
Joe’s Cost of Living
Equations
$24,000.00 in Denver x 148.2
102.9 = Equivalent salary in Seattle
$32,000.00 in Seattle x 102.9
148.2 = Equivalent salary in Denver
Option 1 or Option 2
© 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
1.1.3.G1
Joe’s Cost of Living
Equations
$24,000.00 x 1.4402332 =
$34,565.60 = Equivalent salary in Seattle
$32,000.00 x .6943319 =
$22,218.62 = Equivalent salary in Denver
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
1.1.3.G1
Joe’s Job Outcome
• A person earning $24,000.00 in Denver must earn $34,565.60 in
Seattle to have the same spending power.
– Or
• A person earning $32,000.00 in Seattle must earn $22,218.62 in
Denver to have the same spending power.
• Therefore, the salary offer in Denver is better by $2,565.60
($34,565.60 - $32,000.00).
Job Offer 1
$24,000.00 in Denver, CO
Job Offer 2
$34,565.60 in Seattle, WA
© 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
1.1.3.G1
Benefits
Fringe benefits and employer provided services can
make a difference:
– For example, if a $35,000.00 job had 100% of
medical insurance coverage valuing $400.00 per
month, a person would not have to budget for
$4,800.00 in medical insurance per year. This
would increase the value of his or her salary to
$39,800.00.
– 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 19
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.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 20
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.G1
Sara’s Job including
benefit package
• Job Offer 1 – Reno, NV
– $35,000.00 salary + $4,800.00 benefits = $39,800.00
– 105.1 cost of living index
• Job Offer 2 – Anchorage, AK
– $40,000.00 salary + $5,200.00 benefits = $45,200.00
– 123.1 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
1.1.3.G1
Sara’s Job including
benefit package
$39,800.00 in Reno x 123.1
105.1 = Equivalent salary in Anchorage
$45,200.00 in Anchorage x 105.1
123.1 = Equivalent salary in Reno
Option 1 or Option 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
1.1.3.G1
Sara’s Job including
benefit package
$39,800.00 x 1.1712654 =
$46,616.36 = Equivalent salary in Anchorage
$45,200.00 x .8537774 =
$38,590.74 = Equivalent salary in Reno
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
1.1.3.G1
Sara’s Job Outcome
including benefit package
• A person earning $39,800.00 in Reno must earn $46,566.00 in
Anchorage to have the same spending power.
-Or
• A person earning $45,200.00 in Anchorage must earn $38,590.74 in Reno to have the same spending power.
• Therefore, with the benefits package included, the job offer in
Reno is higher.
Job Offer 1
$39,800.00 (with benefits) in
Reno, NV
Job Offer 2
$45,200.00 (with benefits) in
Anchorage, AK
© 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
1.1.3.G1
Joe’s Job including
benefit package
• Job offer 1 - Denver, CO
– $24,000.00 salary + $4,500.00 benefits =$28,500.00
– 102.9 cost of living index
• Job offer 2 - Seattle, WA
– $32,000.00 salary +$6,000.00 benefits = $38,000.00
– 148.2 cost of living index
© 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
1.1.3.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 26
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.G1
Joe’s Job including
benefit package
$28,500.00 in Denver x 148.2 102.9
= Equivalent salary in Seattle
$38,000.00 in Seattle x 102.9
148.2 = Equivalent salary in Denver
Option 1 or Option 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
1.1.3.G1
Joe’s Job including
benefit package
$28,500.00 x 1.4402332 =
$41,046.65 = Equivalent salary in Seattle
$38,000.00 x .6943319 =
$26,384.61 = Equivalent salary in Denver
Option 1 or Option 2
© 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
1.1.3.G1
Joe’s Job Outcome
including benefit package
• A person earning $28,500.00 in Denver must earn $41,046.65 in Seattle to have the same spending power.
Or • A person earning $38,000.00 in Seattle must earn $26,384.61 in
Denver to have the same spending power.
• Therefore, with the benefits package included, the job offer in
Denver is higher.
Job Offer 1
$28,500.00(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 29
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
1.1.3.G1
Additional Web sites
• Web sites available to help calculate
salaries and cost of living in various
locations
– www.homefair.com
– www.bankrate.com/brm/movecalc.asp
– www.accra.org
• $12.95 fee
Questions?
