Rock-bottom cost-of-living and per capita income statistics have made the Provo-Orem area the economic equivalent of the old good news-bad news joke.

The good news: Of more than 250 metropolitan areas surveyed earlier this year by the American Chamber of Commerce Researchers Association, the Provo-Orem area had the lowest cost of living in the country - some 12.5 percent below than the national average.Now the bad news: Of 317 metropolitan areas checked by the U.S. Commerce Department in 1986, Provo-Orem was fourth from the bottom in per capita income - the average earned for every man, woman and child.

The Commerce Department's bottom five of per capita income, Provo-Orem and four border regions of Texas, were highlighted in a color graph on the front page of the USA Today newspaper last month, under the the erroneous headline "Smallest paychecks."

Local officials are quick to point out that average wages paid are only one factor in per capita income. Because other factors were not considered, the Commerce Department figures make Provo-Orem area incomes appear lower than they actually are, they say.

However, they don't take issue with the cost-of-living numbers. While Provo-Orem was rated as having the lowest average cost of living in the country only for the final three months of 1987, the American Chamber of Commerce research group in recent years has consistently ranked the area among those with the lowest living costs.

The association does its cost-of-living study every three months. Cost data are collected by chambers of commerce or similar organizations in cities of all population sizes throughout the United states.

The association examines the costs of a market basket of 59 goods and services in each city studied. The collected data are used to develop an index comparing the overall cost of living in the different metropolitan areas.

Indexes are also developed for living costs in six specific categories - food, housing, utilities, transportation, health care and miscellaneous goods and services.

The Provo-Orem area shows up well on all the group's indexes. With the national average at 100, Provo-Orem's overall living cost for the fourth quarter of 1987, the latest period for which data is available, is 87.5.

Boston ranked as the country's overall most expensive city, at 152 or 52 percent higher than the national average.

On the category indexes, the Provo-Orem area ranks as follows: food 86.0, the lowest figure of areas studied; housing 72.4; utilities 89.9; transportation 99.7; health care 92.7; and miscellaneous 92.1.

All the indexes show the area's costs below the national average, in some categories well below.

Officials tout the low cost of living as proof of the advantages of living and doing business in the Provo-Orem area. They also play up the cost-of-living numbers as an economic development tool that helps create new jobs.

Not only do low costs encourage

expansion of existing companies, but they are also a recruiting tool used to lure out-of-state companies to the area.

But the low per capita income figures tend to take some of the luster from the advantageous cost of living numbers.

In 1986, the latest period for which the Commerce Department has released figures, the Provo-Orem area showed an average per capita income of $8,528. Only the McAllen-Edinburg-Mission (6,800), Laredo (6,850) and Brownsville-Harlingen (7,205) border areas of Texas were lower.

By contrast, the Bridgeport-Stamford-Norwalk-Danbury area of Connecticut had the nation's highest average income, $24,501. The national average was $14,639.

Local officials claim the low Provo-Orem per capita income figures are skewed by local residents' tendency to have larger-than-average families and by the high percentage of students, drawn to the area by Brigham Young University and Utah Valley Community College.

"Our population mix is a significant contributor (o the low per capita income figures)," said DeLance Squire, chairman of the Orem Economic Development Commission and the board of trustees of the Utah Valley Economic Development Association.

"In Orem, 58.6 percent of our population is under age 18. The two colleges have a total of 34,000 students. Add the public school enrollment of 66,000 and you have 100,000 students in a total (tah County) population of 260,000. And that doesn't include younger children not yet in school."

While the area has a large population either not in the work force or working only part time, officials admit average wages in the Provo-Orem area are indeed lower than elsewhere in the state and the country.

But the lower wages are the result of demographic factors, and definitely not the result of a backward local economy, they say.

"Our wages tend to be lower because we have a abundance of labor here," said Provo Mayor Joe Jenkins. "Of course the large numbers of young people and students contribute to that."

Lower local wages also are used as an incentive when trying to recruit companies to the area, officials said, but the wage gap is narrowing as more higher-paying jobs are being created.

At least one local processor is having trouble finding enough workers to fill semiskilled positions paying $5.75 per hour. A clothing manufacturer recently decided against locating a factory in the area because it felt not enough minimum-wage labor was available.

When the demographic factors - that is, large families, the younger-than-average population and the higher-than-average percentage of students - are taken into account, the Provo-Orem area actually stacks up pretty well when income statistics are compared, officials say.

In other words, the Commerce Department figures make Provo-Orem incomes look much worse in comparison to other areas than is really the case.

"When you look at per capita incomes, we really take a shellacking," Squire said. "However if you look at household incomes, the figures are not nearly so bad."

As the name implies, household income figures show the average income per household, rather than the average per person shown by per capita numbers.

Paul Stout, marketing director for the Utah Valley Economic Development Association, says statistics show the average household in Utah County has 4.1 persons, compared to the national average of 2.8 persons.

In 1986, Utah County households had an average income of $32,869. That figure is actually slightly higher than the Utah average of $32,342, which ranks eighth among 12 Western states.

The national average for household income in 1986 was $35,101.

The numbers back up the claims of local officials. Household income for Provo-Orem is almost 94 percent of the national average, while per capita income is only 59 percent of the national average.


cost of living

(1987; national average is 100) All items 87.5

Food 86.0

Housing 72.4

Utilities 89.9

Transportation 99.7

Health care 92.7

Miscellaneous 92.1

Lowest Income

Per Capita

(1986; national average $14,639) El Paso, Texas $9,177

Provo-Orem $8,528

Brownsville, Texas $7,205

Laredo, Texas $6,850

McAllen, Texas $6,800

Family income

(1986 average) California $39,318

Colorado $36,823

Texas $35,418

National average $35,101

Wyoming $34,733

Washington $33,798

Nevada $33,329

Utah County $32,839

Arizona $32,636

Utah $32,342

Oregon $30,294

New Mexico $29,574

Idaho $29,187

Montana $28,774