Should Living Wage Minimums be Based on Individuals or Families?

by Brian T. Lynch, MSW

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country... By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act - Franklin Delano Roosevelt)

Question:  In looking at the Living Wage calculator, I see that $10.83 for a single adult in Morris County, New Jersey where I live. This seems fair to me for a single person, but when you add one child to that scenario the rate jumps to $22.12 per hour. This raises a serious question.  Does the Living Wage Movement suggest that wages should be adjusted according to need? [ http://livingwage.mit.edu/ ]

Answer:  That's a great question. I am not a spokesman for, or advocate of, the living wage movement as an organization. I do believe that living wages should be the minimum wage in this country.  Minimum living wages should be what we pay summer college help or student interns, not full-time employees. It might also be appropriate for part-time seasonal help. It shouldn't be what we pay permanently hired employees.

To answer your question, I researched what a living wage is in the 130 cities that have living wage laws. It turns out that their wage base is for a single employee, not including any dependents. A living wage in Manchester CT equals $15.54/hour (the highest) while it is $8.50 in Orlando FL (the lowest).  It would appear that the Living Wage Movement is looking to index a minimum living wage minimum to local economies based on one adult with no dependents.

That said, the minimum wage in 1986 was $10.86/hour  as opposed to its current level of $7.25/hour.  If it had been indexed to inflation in 1986 the current minimum wage today would be $23.59/hour today. That clearly was intended to provide for a worker with a family. The current median family size is 2.54 persons per household. That inflation adjusted wage equals about $47,000 per year while the current median family wage is a little over $51,000 per year (and still declining, I might add).

Here's the thing, we have only been talking about wage adjustments to keep pace with inflation. We have not been talking about raising wages to reward workers for our growing productivity. We haven't been talking about sharing the wealth that workers help create so everyone keeps pace with America's growing economy. Cost of living adjustments are important, but they shouldn't be confused with a productivity, or merit raise.

America is $1.7 trillion richer today than it was in 1976. Our economy has doubled, yet the share of all that new wealth created by American workers in this same period is insignificant.

In the 1960's my father was an appliance repairman at Sears. His salary was enough that my mother could stay home and raise my sister and me. Her role as mother to the next generation of citizens was valued. Today, a typical family of four earns about $51,000 only because both parents work. They are only able to make ends meet because of easy access to credit to shift their financial burdens onto their future earnings.

When I speak about a living wage I dream of getting back to a point where one breadwinner can hold one full-time job and still raise a small family without needing government assistance to do it. That's what we had, and that should be our goal for America.