Did you know that DEED produces cost of living estimates? It's true! In addition to our more well-known wage data, we also create and publish estimates of what varying family types  should expect to earn to meet basic needs. Our Cost of Living tool provides these estimates by major expense categories such as housing, transportation, child care, food, health care, other necessities, and taxes.

These estimates are meant to be at the basic needs level, so not poverty level, but also not including any "extra" expenses like entertainment or recreation. Recently, we published the 2023 updates to the dataset. This is a great occasion to revisit the estimates for Northeast Minnesota and see how they compare against wage figures that were also recently updated.

The Cost of Living tool provides estimates all the way down to the county level, as well as at the economic development region, planning region, and statewide level. The estimates are also available for 24 different family compositions and working arrangements. The average family size in Minnesota is three, with a "typical" arrangement of one partner working full-time, one working part-time, and one child. Combined, the two working partners total an average of 60 hours a week. Based on this "typical" family size and employment situation, the total annual cost of living in Northeast Minnesota was estimated at $60,228, requiring an average of $19.30 per hour across the 60 average hours worked. Among the six planning regions, Northeast Minnesota's cost of living was fourth highest, above Southwest and Northwest Minnesota (see Table 1).

Costs are displayed as monthly values, to match how households typically think of expenses. Among the major cost categories, housing was the most expensive, followed by transportation, food and taxes. Housing alone accounted for nearly a fifth of all costs, and the top three combined for three-fifths of total costs. Health care, other necessities¹, and child care round out the order. Relative to the state, child care (72% of statewide average) was the most affordable of the cost categories in the region, followed by taxes (81%) and housing (84%). Health care was the only expense in the region that exceeded the statewide average, by $2 per month.

On the income side, the median wage for all jobs in Northeast Minnesota that was released in early 2024² was $23.41 per hour, or $48,694 annually. At first look, all is good. The median wage for occupations in the region is enough to cover the typical basic needs costs of living in the region, especially for single individuals where, depending on age, the hourly wage needed to cover costs ranged from $14.84 to $14.98. However, we know that costs vary quite a bit depending on an individual family's needs, and in some scenarios, not all jobs offer the wages sufficient to cover all expenses.

Based on the estimated costs for a typical family with one child, where one partner works full-time and the other part-time, there were seven (out of 22) occupational groups, accounting for 28% of all jobs, where even the 10th percentile wage was enough to meet needs. Conversely, there were five occupational groups (Healthcare Support, Food Preparation & Serving Related, Building & Grounds Cleaning & Maintenance, Personal Care & Service, and Sales & Related) where at least half of the jobs paid below the necessary threshold (see highlighted cells in Table 2). Those five occupational groups accounted for 31% of all jobs in the region. In fact, the 75th percentile wage for Food Preparation & Serving Related positions fell under the average hourly wage needed to cover a typical family's costs. This means that most of these jobs would not be able to support a typical family of three in the region, if both workers were employed in this field.

It is almost impossible to capture the full diversity of families and their varying needs and preferences. As such, our cost of living figures are meant to be the best estimates of typical conditions, needs and family compositions, not representative of every potentiality. That said, the comparison of regional wages and costs of living can be a useful exercise to show how a family's needs may preclude certain jobs as insufficient and highlight others as a means to meet required expenses. This can be true even within an occupational group as certain positions – perhaps those requiring more experience, skill, education or training – offer higher wages. The Labor Market Information Office will continue to track the relationship between wages and costs as an important dynamic in local labor markets.

For more information about health care careers in Northeast Minnesota, contact Carson Gorecki at carson.gorecki@state.mn.us.

¹The cost of Other Necessities covers basic costs not covered by any of the other cost categories. These costs include apparel, personal care products and services, reading, education, and miscellaneous items.

²Based on a survey conducted in 2021-2023 and accounting for inflation.