Company Announcements

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)--Jun. 29, 2022-- 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

 

Cassie Lenski
+1 469-841-8999
Cassie.lenski@mercer.com

Source: Mercer