Cost of Living for All Major US Cities Increased in 2023, Making It Less Affordable for Expatriates, According to Mercer Survey

NEW YORK--(BUSINESS WIRE)-- Today, Mercer announced the results of its 2023 Cost of Living Survey with New York City remaining the most expensive city in North America for expatriates, ranking 6^th worldwide, while Hong Kong retained the top spot globally out of 227 cities from across five continents. The survey found that all US cities have increased in the ranking, making it less affordable for employees, particularly for expatriates (expats) who move to the US for international assignments. As many global companies with US operations source a significant part of their workforce outside the US, combined with a tight labor market, a higher cost of living could impact expats’ willingness to relocate, further exacerbating staffing needs.

Mercer’s Cost of Living survey helps employers design efficient and equitable compensation packages for assignment locations worldwide. The survey found that all US cities have risen in the ranking since last year, primarily due to prolonged inflation and exchange-rate fluctuations, which is having a direct impact on the pay and savings of international employees.

In addition to a volatile economic climate triggered by COVID-19 and the introduction of aggressive national monetary policies to help tamp down inflation, a continued hybrid working model is causing many employees to reconsider their priorities, assess their work-life balances, and think about the places in which they have chosen to live.

While Mercer’s Cost of Living research primarily helps employers determine compensation strategies for international assignees, Vince Cordova, Partner in Mercer’s Mobility Practice, is mindful that current socio-economic conditions affect all employees and their employers.

“The US has had a cost-of-living crisis brewing for some time and a severe housing shortage in high-growth areas, but COVID-19 only exacerbated this issue. This will be a pervasive and persistent issue, not just for international employees, but domestic employees as well,” said Cordova.

“Inflation and cost of living impact everyone, and it’s imperative to keep in mind that those who make the least are impacted the most,” Cordova continued. “In developing pay strategies that are equitable and sustainable, employers need to understand how those factors impact these individuals as part of their broader rewards strategies.”

Pay equity and transparency are also becoming key factors for both employers and employees as states such as California, Washington, and New York have introduced legislation to disclose salary ranges in job postings. "Companies are still navigating their way in the pay transparency space, but more visibility on compensation factors will also help employees who are considering international assignments understand how they should be thinking about pay and how their financial wellness could be impacted by living in the US,” added Cordova.

More than ever before, employees are now armed with information to help them understand the value of their skills, experience, and education in a given market. “Competition in the global talent market is fierce, and with the cost-of-living crisis affecting both employees and organizations, employers need to be flexible. This has prompted multinational employers to reassess how they manage their workforces,” said Yvonne Traber, Partner, and Global Head of the Mobility Practice at Mercer. “Failing to implement competitive international compensation strategies in times of economic uncertainty and to align internal and external pay range will determine organizations’ competency in the ability to attract and retain top talents.”

Regional Insights

Behind New York City, Los Angeles (11 in the global ranking) is the second most expensive city in North America, followed by San Francisco (14) and Honolulu (15). The largest increases in the cost of living in North America were seen in Detroit (+27 positions), Houston, and Cleveland (both +24 positions). Canadian cities are at the cheaper end of the ranking for North America, with all of them having dropped since last year. Toronto is ranked the most expensive in Canada (90 in the global ranking), followed by Vancouver (116), and Montreal (135).

About Mercer’s Cost of Living Survey

Mercer's widely recognized Cost of Living ranking is one of the world’s most comprehensive studies and is designed to help multinational companies and governments determine compensation strategies for their international assignees. New York City is used as the base city for all city ranking comparisons and currency movements are measured against the US dollar.

The survey includes 400+ cities throughout the world; this year’s ranking includes 227 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment. The data collected provides all of the key elements employers need to design efficient and transparent compensation packages for international assignees. Learn more here.

About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 85,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.

Mercer 2023 Cost of Living Ranking

Rank 2023	City	Location
1	Hong Kong	Hong Kong (SAR)
2	Singapore	Singapore
3	Zurich	Switzerland
4	Geneva	Switzerland
5	Basel	Switzerland
6	New York City, NY	United States
7	Bern	Switzerland
8	Tel Aviv	Israel
9	Copenhagen	Denmark
10	Nassau	Bahamas
11	Los Angeles, CA	United States
12	Shanghai	China
13	Beijing	China
14	San Francisco, CA	United States
15	Honolulu, HI	United States
16	Seoul	South Korea
17	London	United Kingdom
18	Dubai	United Arab Emirates
19	Tokyo	Japan
20	Shenzhen	China
21	Boston, MA	United States
22	Miami, Fl	United States
23	Washington, DC	United States
24	Chicago, IL	United States
25	Vienna	Austria
26	Bangui	Central African Republic
27	Djibouti	Djibouti
28	Amsterdam	Netherlands
29	Atlanta, GA	United States
30	Luanda	Angola
31	Seattle, WA	United States
32	Kinshasa	The Democratic Republic of the Congo
33	Prague	Czech Republic
34	Helsinki	Finland
35	Paris	France
36	Guangzhou	China
37	Berlin	Germany
38	Munich	Germany
39	Conakry	Guinea Republic
40	N'Djamena	Chad
41	Brussels	Belgium
42	Victoria	Seychelles
43	Abu Dhabi	United Arab Emirates
44	San Juan	Puerto Rico
45	Buenos Aires	Argentina
46	The Hague	Netherlands
47	Lagos	Nigeria
48	Frankfurt	Germany
49	Milan	Italy
50	Philadelphia, PA	United States
51	Dublin	Ireland
52	Libreville	Gabon
53	Dallas, TX	United States
54	Montevideo	Uruguay
55	Qingdao	China
56	Sydney	Australia
57	Taipei	Taiwan
58	Luxembourg	Luxembourg
59	Rome	Italy
60	Oslo	Norway
61	Houston, TX	United States
62	Hamburg	Germany
63	San Jose	Costa Rica
64	Riga	Latvia
65	Pittsburgh, PA	United States
66	Dakar	Senegal
67	Minneapolis, MN	United States
68	Busan	South Korea
69	Stuttgart	Germany
70	Noumea	New Caledonia
71	Melbourne	Australia
72	Portland, OR	United States
73	Nanjing	China
74	Dusseldorf	Germany
75	Barcelona	Spain
76	Shenyang	China
77	Abidjan	Côte D'Ivoire
78	St. Louis, MO	United States
79	Mexico City	Mexico
80	Detroit, MI	United States
81	Douala	Cameroon
82	Brisbane	Australia
83	Madrid	Spain
84	Brazzaville	The Republic Of Congo
85	Riyadh	Saudi Arabia
86	Edinburgh	United Kingdom
87	Santiago	Chile
88	Cleveland, OH	United States
89	Chengdu	China
90	Toronto	Canada
91	Leipzig	Germany
92	Lyon	France
93	Osaka	Japan
94	Canberra	Australia
95	Stockholm	Sweden
96	Nuremberg	Germany
97	Athens	Greece
98	Manama	Bahrain
99	Chongqing	China
100	Tallinn	Estonia
101	Jeddah	Saudi Arabia
102	Yaounde	Cameroon
103	Pointe-à-Pitre	Guadeloupe (France)
104	Bratislava	Slovakia
105	Bangkok	Thailand
106	Adelaide	Australia
107	Perth	Australia
108	Xian	China
109	Glasgow	United Kingdom
110	Amman	Jordan
111	Auckland	New Zealand
112	Suzhou	China
113	Nagoya	Japan
114	Harare	Zimbabwe
115	Yokohama	Japan
116	Vancouver	Canada
117	Lisbon	Portugal
118	Birmingham	United Kingdom
119	Aberdeen	United Kingdom
120	Port of Spain	Trinidad & Tobago
121	Toulouse	France
122	Wuhan	China
123	Vilnius	Lithuania
124	Taichung	Taiwan
125	Belfast	United Kingdom
126	Doha	Qatar
127	Kingston	Jamaica
128	Bamako	Mali
129	Bujumbura	Burundi
130	Muscat	Oman
131	Kuwait City	Kuwait
132	Phnom Penh	Cambodia
133	Manila	Philippines
134	Lome	Togo
135	Montreal	Canada
136	Guatemala City	Guatemala
137	Ottawa	Canada
138	Kaohsiung	Taiwan
139	Wellington	New Zealand
140	Abuja	Nigeria
141	Yerevan	Armenia
142	Bucharest	Romania
143	Ljubljana	Slovenia
144	Cotonou	Benin
145	Calgary	Canada
146	Zagreb	Croatia
147	Mumbai	India
148	Panama City	Panama
149	Ouagadougou	Burkina Faso
150	Quito	Ecuador
151	Jakarta	Indonesia
152	Sao Paulo	Brazil
153	Tirana	Albania
154	Dhaka	Bangladesh
155	Monterrey	Mexico
156	Hanoi	Vietnam
157	Niamey	Niger
158	Casablanca	Morocco
159	Maputo	Mozambique
160	Santo Domingo	Dominican Republic
161	Budapest	Hungary
162	Dar Es Salaam	Tanzania
163	Nouakchott	Mauritania
164	Ho Chi Minh City	Vietnam
165	Limassol	Cyprus
166	Kampala	Uganda
167	Lima	Peru
168	Sofia	Bulgaria
169	New Delhi	India
170	Warsaw	Poland
171	Rio De Janeiro	Brazil
172	Bandar Seri Begawan	Brunei
173	Nairobi	Kenya
174	Rabat	Morocco
175	Belgrade	Serbia
176	San Salvador	El Salvador
177	Baku	Azerbaijan
178	Accra	Ghana
179	Tegucigalpa	Honduras
180	Kuala Lumpur	Malaysia
181	Tbilisi	Georgia
182	Minsk	Belarus
183	Port-Au-Prince	Haiti
184	Chennai	India
185	Istanbul	Turkey
186	Wroclaw	Poland
187	Port Louis	Mauritius
188	Brasilia	Brazil
189	Bengaluru	India
190	Krakow	Poland
191	Kigali	Rwanda
192	Asuncion	Paraguay
193	Antananarivo	Madagascar
194	Addis Ababa	Ethiopia
195	La Paz	Bolivia
196	Manaus	Brazil
197	Lusaka	Zambia
198	Blantyre	Malawi
199	Belo Horizonte	Brazil
200	Skopje	Macedonia
201	Managua	Nicaragua
202	Hyderabad	India
203	Sarajevo	Bosnia-Herzegovina
204	Yangon	Myanmar
205	Johannesburg	South Africa
206	Algiers	Algeria
207	Banjul	Gambia
208	Almaty	Kazakhstan
209	Vientiane	Lao People's Democratic Republic
210	Cape Town	South Africa
211	Kolkata	India
212	Johor Bahru	Malaysia
213	Pune	India
214	Bogota	Colombia
215	Colombo	Sri Lanka
216	Gaborone	Botswana
217	Cairo	Egypt
218	Tashkent	Uzbekistan
219	Tunis	Tunisia
220	Durban	South Africa
221	Ankara	Turkey
222	Windhoek	Namibia
223	Dushanbe	Tajikistan
224	Bishkek	Kyrgyzstan
225	Havana	Cuba
226	Karachi	Pakistan
227	Islamabad	Pakistan

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230627021313/en/

Media:

Ashleigh Jang

Mercer

+1 917 647 0070

Ashleigh.Jang@mercer.com

Source: Mercer