comparing job offers 1.1.3.g1
DESCRIPTION
TRANSCRIPT
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 SalaryDollar 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 perksRelocation allowances Company car Repayment of education loans Stock optionsGym membership Flexible hours Merchandise discounts Child careTelecommuting
Location and Environment• Commut
e time • Affordabl
e 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
123.1105.1
= Equivalent Salary in Anchorage
$40,000.00 in Anchorage x
105.1123.1
= 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
148.2102.9
= Equivalent salary in Seattle
$32,000.00 in Seattle x
102.9148.2
= 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
105.1123.1
= 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
148.2102.9
= Equivalent salary in Seattle
$38,000.00 in Seattle x
102.9148.2
= 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/move
calc.asp–www.accra.org
• $12.95 fee
Questions?