Comparing Job Offers 1.1.3<br />Take Charge of Your Finances<br />Family Economics and Financial Education<br />
Supply and Demand<br />The availability of jobs and the rate of pay is dependent upon the economic concept of supply and d...
Congratulations!<br />Sara just graduated from college with a teaching degree and received two job offers.  Which is the b...
Which is the better deal?<br />Job Offer 1<br />$35,000.00 in Reno, NV<br />Job Offer 2<br />$40,000.00 in Anchorage, AK<b...
Cost of Living<br />Cost of living – includes housing, food, transportation, and other everyday expenses.<br />Rural commu...
Comparing Job Offers <br />In groups of 3-4 participants brainstorm examples for each of the following categories: <br />A...
Holidays and vacation time
Bonuses
Health and life insurance
Workman’s compensation
Retirement contributions</li></ul>Opportunity for Advancement  & Other Work Incentives<br /><ul><li>Raised based on perfor...
Guaranteed pay raise based on longevity </li></ul>Location and Environment<br /><ul><li>Commute time
Affordable housing
Low crime rate
Good schools
Desired climate</li></li></ul><li>Cost of Living Equation<br />Cost of Living Index of City 2<br />Salary in city 1 x<br /...
Sara’s Job Offers<br />Job Offer 1 – Reno, NV<br />$35,000.00 salary<br />105.1 cost of living index<br />Job Offer 2 – An...
Sara’s Cost of Living Equations<br />123.1<br />$35,000.00 in Reno x<br />= Equivalent Salary in Anchorage<br />105.1<br /...
Sara’s Cost of Living Equations<br />$35,000.00  x  1.1712654  =<br />$40,994.29  =  Equivalent salary in Anchorage<br />O...
Sara’s Job Outcome<br /><ul><li>A person earning $35,000.00 in Reno must earn $40,994.29 in Anchorage to have the same spe...
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).</li></li></ul><li>Joe’s Offers<br />Jo...
Cost of Living Equation<br />Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br ...
Joe’s Cost of Living Equations<br />Option 1 or Option 2 <br />$24,000.00  x  1.4402332  = <br />$34,565.60  =  Equivalent...
Joe’s Job Outcome<br /><ul><li>A person earning $24,000.00 in Denver must earn $34,565.60 in Seattle to have the same spen...
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).</li></li></ul><li>Benefits<br />Fr...
Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br />Cost of Living Index of Cit...
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Comparing job offers 1.1.3.g1

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  • Changes on Slides 4, 6
  • Added option C because it is in the body of the LP
  • Comparing job offers 1.1.3.g1

    1. 1. Comparing Job Offers 1.1.3<br />Take Charge of Your Finances<br />Family Economics and Financial Education<br />
    2. 2. Supply and Demand<br />The availability of jobs and the rate of pay is dependent upon the economic concept of supply and demand. <br />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. <br />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. <br />
    3. 3. Congratulations!<br />Sara just graduated from college with a teaching degree and received two job offers. Which is the best deal?<br />
    4. 4. Which is the better deal?<br />Job Offer 1<br />$35,000.00 in Reno, NV<br />Job Offer 2<br />$40,000.00 in Anchorage, AK<br />Not enough information to decide<br />Which option is best?<br />
    5. 5. Cost of Living<br />Cost of living – includes housing, food, transportation, and other everyday expenses.<br />Rural communities often have a lower cost of living than urban communities.<br />Index form – rates communities on a scale of 100.0 and gives an average cost community a rating of 100.0.<br />A lower index means a lower cost of living.<br />A higher index means a higher cost of living.<br />
    6. 6. Comparing Job Offers <br />In groups of 3-4 participants brainstorm examples for each of the following categories: <br />Additional perks<br />Relocation allowances <br />Company car <br />Repayment of education loans <br />Stock options<br />Gym membership <br />Flexible hours <br />Merchandise discounts <br />Child care<br />Telecommuting <br />Base Salary<br />Dollar amount a person will receive in his/her monthly paycheck before taxes. Based upon supply and demand<br />Fringe Benefits<br /><ul><li>Paid sick time
    7. 7. Holidays and vacation time
    8. 8. Bonuses
    9. 9. Health and life insurance
    10. 10. Workman’s compensation
    11. 11. Retirement contributions</li></ul>Opportunity for Advancement & Other Work Incentives<br /><ul><li>Raised based on performance
    12. 12. Guaranteed pay raise based on longevity </li></ul>Location and Environment<br /><ul><li>Commute time
    13. 13. Affordable housing
    14. 14. Low crime rate
    15. 15. Good schools
    16. 16. Desired climate</li></li></ul><li>Cost of Living Equation<br />Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br />Cost of Living Index of City 1<br /><ul><li>Round dollar amounts to two decimal places</li></li></ul><li>Cost of Living Equation<br />In order to compare the cost of living in two cities always follow these three steps: <br />Step 1: Assign each cities numbers. One city will be assigned the number one and the other the number two. <br />Step 2: Provide the corresponding salaries and index amounts. <br />Step 3: Complete the math and indicate which city is a better offer and why. <br />
    17. 17. Sara’s Job Offers<br />Job Offer 1 – Reno, NV<br />$35,000.00 salary<br />105.1 cost of living index<br />Job Offer 2 – Anchorage, AK<br />$40,000.00 salary<br />123.1 cost of living index<br />
    18. 18. Sara’s Cost of Living Equations<br />123.1<br />$35,000.00 in Reno x<br />= Equivalent Salary in Anchorage<br />105.1<br />Option 1 or Option 2<br />105.1<br />$40,000.00 in Anchorage x<br />= Equivalent Salary in Reno<br />123.1<br />
    19. 19. Sara’s Cost of Living Equations<br />$35,000.00 x 1.1712654 =<br />$40,994.29 = Equivalent salary in Anchorage<br />Option 1 or Option 2 <br />$40,000.00 x .8537774 =<br />$34,151.35 = Equivalent salary in Reno<br />
    20. 20. Sara’s Job Outcome<br /><ul><li>A person earning $35,000.00 in Reno must earn $40,994.29 in Anchorage to have the same spending power.
    21. 21. Or
    22. 22. A person earning $40,000.00 in Anchorage must earn $34,151.35 in Reno to have the same spending power.
    23. 23. Therefore, the salary offer in Reno is better by $994.29 ($40,994.29 - $40,000.00).</li></li></ul><li>Joe’s Offers<br />Job Offer 1- Denver, CO <br />$24,000.00 salary<br />102.9 cost of living index<br />Job Offer 2 - Seattle, WA <br />$32,000.00 salary<br />148.2 cost of living index<br />
    24. 24. Cost of Living Equation<br />Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br />Cost of Living Index of City 1<br /><ul><li>Round dollar amounts to two decimal places</li></li></ul><li>Joe’s Cost of Living Equations<br />148.2<br />$24,000.00 in Denver x<br />= Equivalent salary in Seattle<br />102.9<br />Option 1 or Option 2<br />102.9<br />$32,000.00 in Seattle x<br />= Equivalent salary in Denver<br />148.2<br />
    25. 25. Joe’s Cost of Living Equations<br />Option 1 or Option 2 <br />$24,000.00 x 1.4402332 = <br />$34,565.60 = Equivalent salary in Seattle<br />$32,000.00 x .6943319 = <br />$22,218.62 = Equivalent salary in Denver<br />
    26. 26. Joe’s Job Outcome<br /><ul><li>A person earning $24,000.00 in Denver must earn $34,565.60 in Seattle to have the same spending power.
    27. 27. Or
    28. 28. A person earning $32,000.00 in Seattle must earn $22,218.62 in Denver to have the same spending power.
    29. 29. Therefore, the salary offer in Denver is better by $2,565.60 ($34,565.60 - $32,000.00).</li></li></ul><li>Benefits<br />Fringe benefits and employer provided services can make a difference:<br />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.<br />Benefits and services should be included within the salary before calculating the cost of living.<br />
    30. 30. Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br />Cost of Living Index of City 1<br />Sara’s Job including benefit package <br /><ul><li>Round dollar amounts to two decimal places</li></li></ul><li>Sara’s Job including benefit package<br />Job Offer 1 – Reno, NV<br />$35,000.00 salary + $4,800.00 benefits = $39,800.00<br />105.1 cost of living index<br />Job Offer 2 – Anchorage, AK<br />$40,000.00 salary + $5,200.00 benefits = $45,200.00<br />123.1 cost of living index<br />
    31. 31. Sara’s Job including benefit package<br />Option 1 or Option 2 <br />123.1<br />$39,800.00 in Reno x<br />= Equivalent salary in Anchorage<br />105.1<br />105.1<br />$45,200.00 in Anchorage x<br />= Equivalent salary in Reno<br />123.1<br />
    32. 32. Option 1 or Option 2<br />Sara’s Job including benefit package<br />$39,800.00 x 1.1712654 = <br />$46,616.36 = Equivalent salary in Anchorage<br />$45,200.00 x .8537774 = <br />$38,590.74 = Equivalent salary in Reno<br />
    33. 33. Sara’s Job Outcome including benefit package<br /><ul><li>A person earning $39,800.00 in Reno must earn $46,566.00 in Anchorage to have the same spending power.</li></ul>-Or <br /><ul><li>A person earning $45,200.00 in Anchorage must earn $38,590.74 in Reno to have the same spending power.
    34. 34. Therefore, with the benefits package included, the job offer in Reno is higher. </li></li></ul><li>Joe’s Job including benefit package<br />Job offer 1 - Denver, CO<br />$24,000.00 salary + $4,500.00 benefits =$28,500.00<br />102.9 cost of living index<br />Job offer 2 - Seattle, WA<br />$32,000.00 salary +$6,000.00 benefits = $38,000.00<br />148.2 cost of living index<br />
    35. 35. Cost of Living Equation<br />Cost of Living Index of City 2<br />Salary in city 1 x<br />= Equivalent Salary in city 2<br />Cost of Living Index of City 1<br /><ul><li>Round dollar amounts to two decimal places</li></li></ul><li>Joe’s Job including benefit package<br />Option 1 or Option 2<br />148.2<br />$28,500.00 in Denver x<br />= Equivalent salary in Seattle<br />102.9<br />102.9<br />$38,000.00 in Seattle x<br />= Equivalent salary in Denver<br />148.2<br />
    36. 36. Joe’s Job including benefit package<br />Option 1 or Option 2 <br />$28,500.00 x 1.4402332 = <br />$41,046.65 = Equivalent salary in Seattle<br />$38,000.00 x .6943319 = <br />$26,384.61 = Equivalent salary in Denver<br />
    37. 37. Joe’s Job Outcome including benefit package<br /><ul><li>A person earning $28,500.00 in Denver must earn $41,046.65 in Seattle to have the same spending power.</li></ul>Or <br /><ul><li>A person earning $38,000.00 in Seattle must earn $26,384.61 in Denver to have the same spending power.
    38. 38. Therefore, with the benefits package included, the job offer in Denver is higher. </li></li></ul><li>Additional Web sites<br />Web sites available to help calculate salaries and cost of living in various locations<br />www.homefair.com<br />www.bankrate.com/brm/movecalc.asp<br />www.accra.org<br />$12.95 fee<br />
    39. 39. Questions?<br />

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