A while back, some people had some negative comments about articles a fellow team member wrote for the Huffington Post's Small Business Section about wages paid by some US outsourcing companies. They accused companies, such as Rural America OnShore Outsourcing, of paying their employees "peanuts" and "slave wages," in order to compete with offshore outsourcing firms. They implied - harshly - that our team members' salaries "couldn't possibly be enough to live on."
We realized these were likely just reactionary comments by people who did not actually live in a small, rural community - as most of the RAOO team members do - but we decided to put our claims to the test with something other than just personal stories. We know, for example, that in the town where our corporate headquarters resides, we can go out to the local supper club tonight and get a great steak with all the fixings for less than $20, around $15 for prime rib when it's the special of the night. That's at least half of what someone would pay in Chicago. Top it off with a pint of beer for about $2.50 (rather than $5 or $6 in Chicago) - that's a pretty cheap night on the town.
But, we wanted to back up these stories with a little research.
So I asked two of my Rural America colleagues, Julie Berglund and Karen Johnson, to share their results.
To start with, we read Today.com's "We are the Median" series. This helped us put money into perspective, and it also told us that where you live can be just as important as how you live. So, we used the cost of living calculator at CNNMoney.com to plug in our location and salary, and discovered what we needed to earn to maintain the same standard of living in other areas of the US. Thus, we began our journey into the 'national median household income' — approximately $50,000 (or $25/hr.) — and how it works for rural Americans. Simply using three sample states in which we operate – Wisconsin, Ohio and Kentucky – we found that $25 per hour will go further in any area of those states than in a major urban area such as Los Angeles or Chicago. Let's bring it down to a daily basis: What can you get with that $25 you earned in an hour – or $50,000 a year – in rural America?
Can your $25 hourly salary buy you a home in rural America? This is almost a no-brainer, but let's take a look at just how extreme these differences can be. In Two Rivers, Wisconsin, home of our corporate headquarters, you can find a 3-bedroom, 1,200 square-foot home for around $85,000. The national average for first time buyers in 2010 was $184,091 for a 1,500 square foot house. The CNNMoney.com cost of living calculator puts LA on the losing end, with anywhere from an 84 percent increase over housing in Milwaukee, to 197 percent more than in Lima, Ohio; our Kentucky workers are somewhere in-between. Folks in Milwaukee would spend about 20 percent more for housing in nearby Chicago - while our Ohio folks would shell out 35-93 percent more, and Kentucky residents, 52-78 percent more. That's a lot of overtime - even at time-and-a-half. And guess what? If you buy a home in rural America, you may find a more predictable appreciation over time than in your urban areas. Why? In large part, LAND! As Will Rogers once said: "Buy land. They ain't making any more of the stuff." We found a 2,500 square foot vacant lot in Chicago for $130,000 - at first that seemed like a pretty good deal. Then we drove down the street to a new rural subdivision in Two Rivers and found a 25,000 square foot lot for $43,000 - that's an even better deal!
Next, let's hit the grocery store and compare prices. We won't get anything fancy, just a few staples: A pound of ground beef, a gallon of whole milk, loaf of white bread, a dozen eggs, a pound of baking potatoes … wait – you want that 12-oz box of Cheerios®, too? If you're in Los Angeles, you'll have to make some tough decisions, because that will put you over your $25.00 budget by almost $1.00. But if you live here in Wisconsin, relax: You can plan on spending anywhere from six to 19 percent less on these food items, with similar differences for our Ohio and Kentucky workers. And, when compared to Chicago, we still come out ahead. Not to be overlooked is that many of our rural workers enjoy a larger outdoor living area, with fewer deed or homeowners associations' restrictions. This allows them to plant gardens and engage in other sustainable food practices that can cut their family's food bill and sometimes even be a source of additional income. If they live just outside of town on a small 'hobby farm', some may even raise their own livestock for meat and eggs. Eating out? You're in for a nice surprise in many smaller towns. The restaurant owner's lower costs of labor and infrastructure, means lower prices for you. And it's not just steak dinners – you can get a large, loaded, double cheeseburger and fries for $3.00. Your doctor may not appreciate that, but your accountant sure will! Try doing that in Chicago!
If you live in Wisconsin, Kentucky or Ohio, your $25 will net you about 7.5 gallons of gas, or about one-half to one gallon more than in Chicago or Los Angeles – and you may have to drive outside those cities to get that. With the increasing popularity and availability of alternative-fuel vehicles, or by using alternative transportation or public transportation, gasoline is becoming less important than it used to be – for some. But for many households it is still an important budgetary consideration.
As mentioned earlier, healthcare and utilities are also important cost-of-living considerations that you can compare with the cost of living calculator. And, while the tool does not detail how it accounts for healthcare costs, we think many of our small-town and rural area counterparts would detail quality-of-life factors, such as less pollution, a more active lifestyle, and healthier – perhaps even home-grown – foodstuffs on their dinner plates, as critical in lower healthcare costs. In summary, we could compare almost any rural area where we operate and have workers, and show a significant difference in cost-of-living compared to urban areas – even large neighboring cities. A person making $50,000 in Bowling Green, Kentucky, would have to double that to achieve the same living standard in Brooklyn, New York. The thing is … he or she doesn't want to live in Brooklyn. Their life – their family, their home, and their happiness – is in 'Small Town, USA'. And now, thanks to rural onshoring, so is their job.
Follow Christopher Hytry Derrington on Twitter: www.twitter.com/chrisruralamer