Inflation, exchange rates and flexible work shaping employee mobility, according to Mercer Cost of Living ranking
New York City (7) remains the most expensive city in the United States, with Hong Kong SAR (1) taking the top spot globally
Inflation, exchange rates, and the war in Ukraine has had a material impact on employees’ pay and savings
Mercer’s annual Cost of Living Survey provides a reference point and helps shape multinational organizations’ approach to calculating appropriate compensation packages for employees on international assignments
NEW YORK–(BUSINESS WIRE)–Today, Mercer announced the results of its 2022 Cost of Living Survey with New York City remaining the most expensive city in the US for expatriates, ranking 7th worldwide, while Hong Kong SAR took the top spot globally. In addition to cost of living data, employee mobility research conducted by Mercer and the learnings from Mercer’s work with clients demonstrates that the war in Ukraine, exchange rate variations and widespread inflation are shrinking employees’ pay and savings.
Both inflation and exchange rate fluctuations directly influence the purchasing power of expatriate employees. The rise of remote and flexible working has also caused many employees to reconsider their priorities, work-life balance and the choice of location to live in. These conditions have serious consequences for employers, who need to rethink their approach to managing a globally distributed workforce, particularly in light tight labor markets. According to a June 2022 survey by Mercer, labor shortages rank as a significant or moderate HR priority for 82% of US employers.
Mercer’s cost of living data helps employers understand the importance of monitoring currency fluctuations and assessing the inflationary and deflationary pressures on goods, services and accommodation in all operating locations. The data also help employers determine and maintain compensation packages for employees on international assignments and when working abroad.
“The volatility triggered by COVID-19 and further worsened by the crisis in Ukraine has fueled global economic and political uncertainty. This uncertainty, coupled with significant rising inflation in most of the countries around the world, has international assignees concerned about their purchasing power and socio-economic stability,” said Yvonne Traber, Partner at Mercer and Global Head for the Mobility Business.
“Failing to adopt competitive international compensation strategies in times of uncertainty and adapt to this new world of work will undermine an organization’s ability to attract and retain top talent,” added Traber.
Conversely, this situation also offers an opportunity for cities and governments looking to attract foreign business, and for businesses looking to attract talent. The cost of living in a location can have a significant impact on its attractiveness as a destination for talent, and it can influence site selection decisions for organizations expanding and transforming their geographic footprint.
“After years of low inflation, the US is now seeing price increases in goods and services at greater rates compared to many other countries. This inflation is also manifesting itself at different levels across cities and regions in the US,” said Vince Cordova, Partner in Mercer’s Career practice. “Given the increased flexibility organizations and individuals have around work location options, understanding these differences and being able to measure how they change over time will be important in designing effective and responsive compensation and talent strategies.”
Regional insights
The Americas
New York City (7) remains the most expensive city in the region, followed by Nassau, Bahamas (16). The remaining US cities are ranked between 17th place and 112th place, Los Angeles (17), San Francisco (19), Honolulu (20), Washington (29), Chicago (36) and Cleveland (112).
The most expensive Canadian city is Toronto (89) followed by Vancouver (108), Montreal (125), Ottawa (132), and least expensive city in Canada is Calgary (141).
In South America, Buenos Aires, Argentina (114) is ranked as the most expensive city in region, followed by Montevideo, Uruguay (123), Santiago, Chile (130), Quito, Ecuador (156), Sao Paulo, Brazil (168). Belo Horizonte (210) is the least expensive city in South America. Managua (212) the capital of Nicaragua is the least expensive city in the Americas.
Asia-Pacific
Four out of 10 most expensive cities to live in for the international assignees are located in Asia, including the single most expensive city in the world – Hong Kong SAR (ranked 1). Singapore (8), Tokyo, Japan (9) and Beijing, China (10) are all on the top 10. The most expensive city in India is Mumbai ranked 127.
The most expensive city in Pacific is Noumea, New Caledonia (54) closely followed by Sydney, Australia (58). Auckland, New Zealand (95) is the most expensive city in New Zealand, and Wellington (120) the least expensive in the Pacific.
Europe
Four European cities are among the top 10 list of most expensive locations. All of those four are based in Switzerland, and Zurich being ranked second within the global ranking, as being the costliest within the European cities, closely followed by Geneva (3rd) and Basel (4th). Other cities in Europe are Copenhagen, Denmark (11), London, United Kingdom (15), Vienna, Austria (21) and Amsterdam, The Netherlands (25).
The most expensive city in Eastern Europe is Prague (Czech Republic) ranked 60th out 227 cities. It is followed by Riga, Latvia (79), Bratislava, Slovakia (105) and Tallinn, Estonia (140). The least expensive city in Eastern Europe is Sarajevo in Bosnia-Herzegovina ranked 209th.
Middle East and Africa
Tel Aviv (Israel) is the costliest city in the Middle East for international employees, ranked on the sixth position within the global ranking. The next in line for this region are cities from the United Arab Emirates, namely Dubai (31) and Abu Dhabi (61). Saudi cities such as Riyadh (103) and Jeddah (111) rank in the middle, closely followed by Amman, Jordan (115) and Manama, Bahrain (117).
In Africa, Bangui (23), Libreville, Gabon (24) and Victoria, Seychelles (38) are the three costliest cities. High in the ranking for this region we find also Djibouti (41), Kinshasa (53) and Lagos (55). The cheapest city in Africa is Tunis, Tunisia ranked 220th.
About Mercer’s Cost of Living Survey
Mercer’s widely recognized Cost of Living ranking is one of the world’s most comprehensive 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 comparisons and currency movements are measured against the US dollar. The survey includes over 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 provide 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 83,000 colleagues and annual revenue of approximately $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 2022 Cost of Living Ranking
Rank
CITY
COUNTRY
1
HONG KONG
HONG KONG (SAR)
2
ZURICH
SWITZERLAND
3
GENEVA
SWITZERLAND
4
BASEL
SWITZERLAND
5
BERN
SWITZERLAND
6
TEL AVIV
ISRAEL
7
NEW YORK CITY, NY
UNITED STATES
8
SINGAPORE
SINGAPORE
9
TOKYO
JAPAN
10
BEIJING
CHINA
11
COPENHAGEN
DENMARK
12
SHANGHAI
CHINA
13
SHENZHEN
CHINA
14
SEOUL
SOUTH KOREA
15
LONDON
UNITED KINGDOM
16
NASSAU
BAHAMAS
17
LOS ANGELES, CA
UNITED STATES
18
GUANGZHOU
CHINA
19
SAN FRANCISCO, CA
UNITED STATES
20
HONOLULU, HI
UNITED STATES
21
VIENNA
AUSTRIA
22
QINGDAO
CHINA
23
BANGUI
CENTRAL AFRICAN REPUBLIC
24
LIBREVILLE
GABON
25
AMSTERDAM
NETHERLANDS
26
NANJING
CHINA
27
OSLO
NORWAY
28
TAIPEI
TAIWAN
29
WASHINGTON, DC
UNITED STATES
30
BOSTON, MA
UNITED STATES
31
DUBAI
UNITED ARAB EMIRATES
32
MIAMI, FL
UNITED STATES
33
MUNICH
GERMANY
34
BUSAN
SOUTH KOREA
35
PARIS
FRANCE
36
CHICAGO, IL
UNITED STATES
37
OSAKA
JAPAN
38
VICTORIA
SEYCHELLES
39
BRUSSELS
BELGIUM
40
SHENYANG
CHINA
41
DJIBOUTI
DJIBOUTI
42
ATLANTA, GA
UNITED STATES
43
HELSINKI
FINLAND
44
CHENGDU
CHINA
45
SEATTLE, WA
UNITED STATES
46
BERLIN
GERMANY
47
THE HAGUE
NETHERLANDS
48
MILAN
ITALY
49
DUBLIN
IRELAND
50
YOKOHAMA
JAPAN
51
NAGOYA
JAPAN
52
LUXEMBOURG
LUXEMBOURG
53
KINSHASA
THE DEMOCRATIC REPUBLIC OF THE CONGO
54
NOUMEA
NEW CALEDONIA
55
LAGOS
NIGERIA
56
CHONGQING
CHINA
57
ROME
ITALY
58
SYDNEY
AUSTRALIA
59
HAMBURG
GERMANY
60
PRAGUE
CZECH REPUBLIC
61
ABU DHABI
UNITED ARAB EMIRATES
62
FRANKFURT
GERMANY
63
XIAN
CHINA
64
LUANDA
ANGOLA
65
DAKAR
SENEGAL
66
EDINBURGH
UNITED KINGDOM
67
MELBOURNE
AUSTRALIA
68
ABIDJAN
CÔTE D’IVOIRE
69
SUZHOU
CHINA
70
PHILADELPHIA, PA
UNITED STATES
71
STUTTGART
GERMANY
72
SAN JUAN
PUERTO RICO
73
WUHAN
CHINA
74
BRAZZAVILLE
THE REPUBLIC OF CONGO
75
DALLAS, TX
UNITED STATES
76
CONAKRY
GUINEA REPUBLIC
77
DOUALA
CAMEROON
78
BARCELONA
SPAIN
79
RIGA
LATVIA
80
N’DJAMENA
CHAD
81
DUSSELDORF
GERMANY
82
PITTSBURGH, PA
UNITED STATES
83
MINNEAPOLIS, MN
UNITED STATES
84
BRISBANE
AUSTRALIA
85
HOUSTON, TX
UNITED STATES
86
GLASGOW
UNITED KINGDOM
87
STOCKHOLM
SWEDEN
88
POINTE-A-PITRE
GUADELOUPE (FRANCE)
89
TORONTO
CANADA
90
MADRID
SPAIN
91
PORTLAND, OR
UNITED STATES
92
TAICHUNG
TAIWAN
93
ABERDEEN
UNITED KINGDOM
94
BIRMINGHAM
UNITED KINGDOM
95
AUCKLAND
NEW ZEALAND
96
LYON
FRANCE
97
PERTH
AUSTRALIA
98
DHAKA
BANGLADESH
99
LEIPZIG
GERMANY
100
YAOUNDE
CAMEROON
101
ST. LOUIS, MO
UNITED STATES
102
ADELAIDE
AUSTRALIA
103
RIYADH
SAUDI ARABIA
104
CANBERRA
AUSTRALIA
105
BRATISLAVA
SLOVAKIA
106
BANGKOK
THAILAND
107
DETROIT, MI
UNITED STATES
108
VANCOUVER
CANADA
109
LISBON
PORTUGAL
110
TOULOUSE
FRANCE
111
JEDDAH
SAUDI ARABIA
112
CLEVELAND, OH
UNITED STATES
113
KAOHSIUNG
TAIWAN
114
BUENOS AIRES
ARGENTINA
115
AMMAN
JORDAN
116
NUREMBERG
GERMANY
117
MANAMA
BAHRAIN
118
BAMAKO
MALI
119
MUSCAT
OMAN
120
WELLINGTON
NEW ZEALAND
121
BELFAST
UNITED KINGDOM
122
MANILA
PHILIPPINES
123
MONTEVIDEO
URUGUAY
124
LOME
TOGO
125
MONTREAL
CANADA
126
ATHENS
GREECE
127
MUMBAI
INDIA
128
COTONOU
BENIN
129
HARARE
ZIMBABWE
130
SANTIAGO
CHILE
131
KUWAIT CITY
KUWAIT
132
OTTAWA
CANADA
133
DOHA
QATAR
134
PHNOM PENH
CAMBODIA
135
PORT OF SPAIN
TRINIDAD & TOBAGO
136
GUATEMALA CITY
GUATEMALA
137
OUAGADOUGOU
BURKINA FASO
138
NIAMEY
NIGER
139
SAN JOSE
COSTA RICA
140
TALLINN
ESTONIA
141
CALGARY
CANADA
142
HAVANA
CUBA
143
CASABLANCA
MOROCCO
144
BUJUMBURA
BURUNDI
145
LJUBLJANA
SLOVENIA
146
ACCRA
GHANA
147
ABUJA
NIGERIA
148
VILNIUS
LITHUANIA
149
MEXICO CITY
MEXICO
150
HANOI
VIETNAM
151
JAKARTA
INDONESIA
152
PANAMA CITY
PANAMA
153
KINGSTON
JAMAICA
154
CAIRO
EGYPT
155
NEW DELHI
INDIA
156
QUITO
ECUADOR
157
VIENTIANE
LAO PEOPLE’S DEMOCRATIC REPUBLIC
158
BUCHAREST
ROMANIA
159
ZAGREB
CROATIA
160
NAIROBI
KENYA
161
TIRANA
ALBANIA
162
RABAT
MOROCCO
163
HO CHI MINH CITY
VIETNAM
164
DAR ES SALAAM
TANZANIA
165
LIMASSOL
CYPRUS
166
KAMPALA
UGANDA
167
MAPUTO
MOZAMBIQUE
168
SAO PAULO
BRAZIL
169
NOUAKCHOTT
MAURITANIA
170
SOFIA
BULGARIA
171
PORT-AU-PRINCE
HAITI
172
LIMA
PERU
173
SANTO DOMINGO
DOMINICAN REPUBLIC
174
WARSAW
POLAND
175
BELGRADE
SERBIA
176
RIO DE JANEIRO
BRAZIL
177
CHENNAI
INDIA
178
BENGALURU
INDIA
179
BANDAR SERI BEGAWAN
BRUNEI
180
BUDAPEST
HUNGARY
181
KUALA LUMPUR
MALAYSIA
182
SAN SALVADOR
EL SALVADOR
183
COLOMBO
SRI LANKA
184
BLANTYRE
MALAWI
185
MONTERREY
MEXICO
186
BAKU
AZERBAIJAN
187
WROCLAW
POLAND
188
ANTANANARIVO
MADAGASCAR
189
TEGUCIGALPA
HONDURAS
190
KRAKOW
POLAND
191
PORT LOUIS
MAURITIUS
192
HYDERABAD
INDIA
193
JOHANNESBURG
SOUTH AFRICA
194
CAPE TOWN
SOUTH AFRICA
195
ASUNCION
PARAGUAY
196
LA PAZ
BOLIVIA
197
YEREVAN
ARMENIA
198
YANGON
MYANMAR
199
LUSAKA
ZAMBIA
200
BRASILIA
BRAZIL
201
PUNE
INDIA
202
BANJUL
GAMBIA
203
KOLKATA
INDIA
204
MINSK
BELARUS
205
BOGOTA
COLOMBIA
206
SKOPJE
MACEDONIA
207
MANAUS
BRAZIL
208
KIGALI
RWANDA
209
SARAJEVO
BOSNIA-HERZEGOVINA
210
BELO HORIZONTE
BRAZIL
211
JOHOR BAHRU
MALAYSIA
212
MANAGUA
NICARAGUA
213
WINDHOEK
NAMIBIA
214
ADDIS ABABA
ETHIOPIA
215
GABORONE
BOTSWANA
216
DURBAN
SOUTH AFRICA
217
TBILISI
GEORGIA
218
ALGIERS
ALGERIA
219
ALMATY
KAZAKHSTAN
220
TUNIS
TUNISIA
221
TASHKENT
UZBEKISTAN
222
ISTANBUL
TÜRKIYE
223
KARACHI
PAKISTAN
224
ISLAMABAD
PAKISTAN
225
DUSHANBE
TAJIKISTAN
226
BISHKEK
KYRGYZSTAN
227
ANKARA
TÜRKIYE
Contacts
Cassie Lenski+1 469-841-8999
Cassie.lenski@mercer.com
