10 Cities With the Highest and Lowest Real Incomes

Beverly Hills, Manhattan, Silicon Valley ...Des Moines?

Other places may be famous for their wealthy celebrities, business tycoons, and tech entrepreneurs, but Des Moines, Iowa, is--at least by one measure--the richest metropolitan area in America. According to a U.S. News analysis of data for large U.S. metropolitan areas (pop. 500,000 or larger), the Hawkeye State capital has the highest median income in the nation relative to the cost of living. It is followed closely by the metro areas of Washington, D.C.; Worcester, Mass.; Houston; and Ogden, Utah. On the other end of the spectrum are the metro areas surrounding McAllen, Texas; New York City; and Fresno, Calif. [See a slide show of the cities with the lowest real incomes and cities with the highest real incomes.]

The adjusted incomes were computed using median household incomes and the cost of living index, or COLI, as measured by the Council for Community Economic Research, an organization that works to improve data availability and quality in community and economic research. The index takes into account prices on a variety of basic goods and services, including groceries, housing, utilities, healthcare, and transportation, as well as common expenses like movie tickets and newspapers. A city with a COLI of 100.0 has spending levels on those items roughly equivalent to the national average, as calculated by the Bureau of Labor Statistics. A city with a high COLI, then, has high prices for things like housing and food, and a low COLI likewise denotes a relatively inexpensive city. These disparate costs of living can mean that a salary in one city has a far different value than the same amount of money in another city. In other words, a worker making roughly $63,000 in expensive New York City has an adjusted income of around $35,000, whereas a worker earning $63,000 in the more affordable Worcester, Mass., has an adjusted income of nearly twice that--just over $61,000.

Below are the 10 metropolitan areas with the highest adjusted median household incomes, as computed from 2009 median household income and cost of living data.

Below are the 10 metropolitan areas with the lowest adjusted median household incomes.

According to Dean Frutiger, project manager for the Cost of LIving Index at the Council for Community and Economic Research, there are some regional patterns to the cost of living. "Generally speaking, the top 10 least expensive cities"--that is, those with the lowest COLIs--"are in Texas, and the top 10 most expensive are in the New York area or California," says Frutiger. Indeed, San Francisco, San Jose, Santa Ana, and three New York City boroughs are among the 10 cities with the highest costs of living for 2009.

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