It Ain't Fair

Corporate America is shutting average Americans' voices out, while they help themselves to taxpayer dollars. The economic playing field is tilted against the middle class — and we have the power to change that.

Cost of living living wage wages fall behind cost of living

Where are all these Great American Jobs?

Top 10 Tough Human Resources Questions

The Bureau of Labor Statistics publishes a monthly report on all American jobs under the Production and Non-Supervisory classification. This category comprises 98.5 million or 82.3% of all private-sector jobs, whether filled or not. Cornell University analyzes and sorts the data based on job quality.  They do this by taking the average hours worked in each category by the hourly wage to determine an average weekly salary.  It does not include the self-employed, farmworkers, gig workers, or management.

     As of September 2020, the mean weekly salary of these 98+ million employees was $845 a week, or just under $44,000 a year. 

     There are 43.4 million jobs that are above the mean weekly income of $845 and 53.9 million below that figure.

The information above covers individual earnings.  The U.S. Census Bureau puts out earnings by household. If it’s a single wage earner, that’s the number. If there are two earners, the average household income is the total amount for both earners. That report says that there are about 128 million households in America and that just over 47 million earn $50,000 or less per year. To break that down even further;

11.7 million households made less than $15,000

10.2 million households made $15,000 to $24,999

10.6 million households made $25,000 to $34,999

15.0 million households made $35,000 to $49,999

I’d like to introduce the Massachusetts Institute of Technology’s Living Wage Calculator; it uses local data for food, rent, taxes, insurance, etc. The Living Wage Calculator was first created in 2004 by Dr. Amy K. Glasmeier.   A description follows: 

INTRODUCTION

Analysts and policymakers often compare income to the federal poverty threshold in order to determine an individual’s ability to live within a certain standard of living. However, poverty thresholds do not account for living costs beyond a very basic food budget. The federal poverty measure does not take into consideration costs like childcare and health care that not only draw from one’s income, but also are determining factors in one’s ability to work and to endure the potential hardships associated with balancing employment and other aspects of everyday life. Further, poverty thresholds do not account for geographic variation in the cost of essential household expenses. 

The living wage model is an alternative measure of basic needs. It is a market-based approach that draws upon geographically specific expenditure data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other basic necessities (e.g., clothing, personal care items, etc.) costs. The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency. 

The living wage model generates a cost of living estimate that exceeds the federal poverty thresholds. As calculated, the living wage estimate accounts for the basic needs of a family. The living wage model does not include funds that cover what many may consider as necessities enjoyed by many Americans. The tool does not include funds for pre-prepared meals or those eaten in restaurants. We do not add funds for entertainment, nor do we incorporate leisure time for unpaid vacations or holidays. Lastly, the calculated living wage does not provide a financial means to enable savings and investment or for the purchase of capital assets (e.g., provisions for retirement or home purchases). The living wage is the minimum income standard that, if met, draws a very fine line between the financial independence of the working poor and the need to seek out public assistance or suffer consistent and severe housing and food insecurity. In light of this fact, the living wage is perhaps better defined as a minimum subsistence wage for persons living in the United States.

FAMILY COMPOSITIONS

For single adult families, the adult is assumed to be employed full-time. For two adult families where both adults are in the labor force, both adults are assumed to be employed full-time. For two adult families where one adult is not in the labor force, one of the adults is assumed to be employed full-time while the other non-wage-earning adult provides full-time childcare for the family’s children. Full-time work is assumed to be year-round, 40 hours per week for 52 weeks, per adult. 

Families with one child are assumed to have a ‘young child’ (4 years old). Families with two children are assumed to have a ‘young child’ and a ‘child’ (9 years old). Families with three children are assumed to have a ‘young child,’ a ‘child,’ and a ‘teenager’ (15 years old). .  (Source: MIT)

Keep in mind that the Living Wage calculation doesn’t represent the income necessary for living a “comfortable” lifestyle; rather, it represents the income needed to cover necessities.  

The following figures are for a family of four with two working adults from MIT’s calculator for 2020.

CITYLIVING WAGE
Los Angeles, CA                   $85,154
Minneapolis, MN$73,382
Phoenix, AZ                            $71,593
Sarasota FL               $67,225
Omaha NE$66,851
Knoxville, TN                      $65,228
Birmingham, AL                    $64,563
Waco, TX                                 $60,028
Spokane, WA$59,987
What this information tells us is that the 47+ million households earning less than $50,000 a year could not have a basic necessities lifestyle in any of the cities listed above.

From another perspective, there are about 54 million jobs in America generating an annual income of less than $44,000.  Single wage earner families would also be unable to live comfortably in these cities, as well as in many others.

All of this information demonstrates that for many families, even a basic necessities lifestyle can be realized only if both the male and female household heads are in the labor force.

Again, some citizens are doing well in America; many aren’t.