1 / 29

Comparing Job Offers 1.1.3

Comparing Job Offers 1.1.3. Take Charge of Your Finances Family Economics and Financial Education. Supply and Demand. The availability of jobs and the rate of pay is dependent upon the economic concept of supply and demand.

nolan-bullock
Download Presentation

Comparing Job Offers 1.1.3

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Comparing Job Offers 1.1.3 Take Charge of Your Finances Family Economics and Financial Education

  2. 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.

  3. Congratulations! • Sara just graduated from college with a teaching degree and received two job offers. Which is the best deal?

  4. Which is the better deal? • Job Offer 1 • $35,000.00 in Reno, NV • Job Offer 2 • $40,000.00 in Anchorage, AK • Not enough information to decide Which option is best?

  5. 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.

  6. Comparing Job Offers • In groups of 3-4 participants brainstorm examples for each of the following categories: Additional perks Relocation allowances Company car Repayment of education loans Stock options Gym membership Flexible hours Merchandise discounts Child care Telecommuting Base Salary Dollar 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 • Location and Environment • Commute time • Affordable housing • Low crime rate • Good schools • Desired climate

  7. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Cost of Living Equation • Round dollar amounts to two decimal places

  8. 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.

  9. 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

  10. Sara’s Cost of Living Equations 123.1 $35,000.00 in Reno x = Equivalent Salary in Anchorage 105.1 Option 1 or Option 2 105.1 $40,000.00 in Anchorage x = Equivalent Salary in Reno 123.1

  11. 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).

  12. 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

  13. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Cost of Living Equation • Round dollar amounts to two decimal places

  14. Joe’s Cost of Living Equations 148.2 $24,000.00 in Denver x = Equivalent salary in Seattle 102.9 Option 1 or Option 2 102.9 $32,000.00 in Seattle x = Equivalent salary in Denver 148.2

  15. 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).

  16. STOP • Comparing Job Practice Activity

  17. 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.

  18. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Sara’s Job including benefit package • Round dollar amounts to two decimal places

  19. 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

  20. Option 1 or Option 2 Sara’s Job including benefit package 123.1 $39,800.00 in Reno x = Equivalent salary in Anchorage 105.1 105.1 $45,200.00 in Anchorage x = Equivalent salary in Reno 123.1

  21. 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.

  22. 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

  23. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Cost of Living Equation • Round dollar amounts to two decimal places

  24. Option 1 or Option 2 Joe’s Job including benefit package 148.2 $28,500.00 in Denver x = Equivalent salary in Seattle 102.9 102.9 $38,000.00 in Seattle x = Equivalent salary in Denver 148.2

  25. 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.

  26. STOP • Comparing Job Practice Activity with Benefits

  27. Additional Web sites • Web sites available to help calculate salaries and cost of living in various locations • www.homefair.com • www.bankrate.com/brm/movecalc.asp • www.accra.org • $12.95 fee

  28. Cost of Index Form • Searching for the COL form

  29. Questions?

More Related