In many American communities, families working in low-wage

jobs make insufficient income to live locally given the local

cost of living.
Recently, in a number of high-cost communities, community
organizers and citizens have successfully argued that the
prevailing wage offered by the public sector and key businesses
should reflect a wage rate required to meet minimum standards of
living.
Therefore we have developed a living wage calculator to estimate
the cost of living in your community or region. The calculator lists
typical expenses, the living wage and typical wages for the
selected location.

Who Uses the Living Wage Tool and Why?

Written by Dr. Amy K. Glasmeier on 09/22/2017
People often ask me, “who uses the living wage tool.” My answer mostly reflects the moment. I get
several user emails a day. The stories and queries range from “Your calculator has no idea how
expensive it is to live in Seattle, I don’t care what the new minimum wage is.” To a single mom who
thanks the tool for being there, but then finishes her missive by reciting the current challenge which
often is about rent or a problem with the family car, or the difficulty of finding inexpensive child care.
Another storyline arises from a conversation I frequently have with employers who see paying a
living wage as a moral issue. Enter Aaron, living in Washington D.C.; a former World Bank employee
turned home-cleaning service entrepreneur. Aaron stepped away from international development to
pursue as he says, “an experiment.” Well-Paid Maids is a living wage-paying home cleaning service.
Using his observation of self and others, he pondered "who would pay a living wage to have their
residence cleaned--perfectly, spotlessly, painlessly?" Aaron researched how firms in other high-
income countries like the U.K. manage to pay living wages. It helps to have organizations like the
Living Wage Foundation, an accounting firm-sponsored group, able to certify more than 3000
companies currently paying a living wage. Aaron figured out the math needed to offer a clean
residence through “Well-Paid Maids” his start-up while still paying everyone a living wage. Aaron is
not alone. Another small business, in need of work ready-employees, turned a business investment
in the firm's own labor force into a product, serving as a trainer of entry-level workers subsequently
made available to neighboring companies also in need of work ready employees. No-cost trades
were made with the proviso that contracting employers agree to pay a living wage to newly hired
employees. What I have learned is this: pointed in the right direction and given the needed
information to make the business case for living wages, firms see it in their own best interest to pay
living wages.
NOTE: We are starting our annual preparation to calculate the 2018 living wage. The recovery from
the financial downturn has mostly taken hold except in communities deeply affected by the loss of
manufacturing jobs. New data will be out starting from December 31 2017. To users: this year saw
outsized increases in housing, child care, and health care costs. Some cities experienced rent
increases between 6-30 percent. Keeping up with major shifts in costs was tough: we saw increases
in the living wage as high as 18 percent. The average was more like 4-6 percent.

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Results from the 2016 Data Update
Written by Dr. Amy K. Glasmeier and Carey Anne Nadeau,
OpenDataNation.com on04/13/2017
Establishing a living wage, an approximate income needed to meet a family’s basic needs, would
enables the working poor to achieve financial independence while maintaining housing and food
security. When coupled with lowered expenses, for childcare and housing in particular, the living
wage might also free up resources for savings, investment, and/or for the purchase of capital assets
(e.g. provisions for retirement or home purchases) that build wealth and ensure long-term financial
security.
The 2016 analysis of the living wage, compiling geographically specific expenditure data for food,
childcare, health care, housing, transportation, and other basic necessities, finds that:
The living wage in the United States is $15.84 per hour, before taxes for a family of four (two working
adults, two children), compared to $15.12 in 2015.
The minimum wage does not provide a living wage for most American families. A typical family of
four (two working adults, two children) needs to work nearly four full-time minimum-wage jobs (a 78-
hour work week per working adult) to earn a living wage. Single-parent families need to work almost
twice as hard as families with two working adults to earn the living wage. A single-mother with two
children earning the federal minimum wage of $7.25 per hour needs to work 143 hours per week,
nearly the equivalent of working 24 hours per day for 6 days, to earn a living wage.
Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need.
State minimum wages provide for only a portion of the living wage. For two adult, two children
families, the minimum wage covers 62.4% of the living wage at best in South Dakota and 41.5% at
worst in Hawaii. This means that families earning between the poverty threshold ($24,491 for two
working adults, two children on average in 2016) and the living wage ($65,860 on average for two
working adults, two children per year before taxes), may fall short of the income and assistance they
require to meet their basic needs.
Living Wage Rate Tied to the Cost of Housing and
Child Care
Written by Dr. Amy K. Glasmeier on 06/14/2017
Living wages include several cost factors; the two most important are housing and child care
expenses . The Living Wage Calculator uses the county level Fair Market Rent (FMR) rate produced
by the Department of Housing and Urban Development as part of its calculus. Using the same
indicator (FMR), new research by The National Low Income Housing Coalition (NLIHC) reinforces
the findings of the living wage tool: the cost of living in the overwhelming majority of the nation's
counties exceeds significantly a full-time income earned based on the minimum wage
(http://nlihc.org/oor). As the NLIHC research shows, rent alone for a two bedroom apartment
requires a wage rate that is more than $21.00 an hour. As the study indicates, this level of income is
2.9 times higher than the minimum wage of $7.25 per hour. Our computation of the living wage
parallels these findings adding weight to the underlying fact; it is almost impossible to make it in
America today based on incomes earned at the level of the minimum wage. According to the report,
"in only 12 counties can a full-time minimum-wage worker afford a modest one- bedroom rental
home."
The Coalition offers a detailed assessment of the struggle to make a living wage given the low pay
associated with the minimum wage. The study points out that occupation matters significantly in a
worker's ability to earn a wage sufficient to cover his or her housing costs. According to the report:
" Six of the seven occupations projected to add the greatest number of jobs by 2024 provide a
median wage that is not sufficient to afford a modest one-bedroom rental home. What is particularly
alarming about the high cost of housing is there are more than 11.2 million severely cost-burdened
renter households spending more than half of their income on housing (NLIHC, 2017c). More than
20 million renter households live in housing poverty, meaning they cannot afford to meet their other
basic needs like food, transportation, medical care, and other goods and services after they pay for
their housing (NLIHC, 2017c)".
The problem of housing affordability is not just the result of low wage work. The rental real estate
market continues to experience high demand. NLIHC reports "a record 43.3 million households were
renters in 2016, representing a 26.5% increase since 2006 (U.S. Census Bureau, 2017b)."
Meanwhile, the homeownership rate dropped from 68.8% to 63.4%. These circumstances combine
to yield a decline in the national rental vacancy rate from 9.8% in the 4th quarter of 2006 to 6.9% in
the 4th quarter of 2016 (U.S. Census Bureau, 2017b). According to the Consumer Price Index (CPI),
the rental cost of a primary residence rose 31.9% over those ten years, which was higher than
overall inflation of 19.1% (U.S. Bureau of Labor Statistics, 2017a)."
Excess demand for rental properties, a negative net increase in low-cost rental property supply and
increasing income inequality fueled by continued growth of low-wage work combine to produce
pressure on individuals and families seeking affordable shelter. The NALIHC reports the greatest
gap in housing availability is in units for the nation's lowest-income people and families. This
shortage reflects both an absence of affordable low-cost units combined with the overall competition
for rental housing that places higher income households into lower cost rental units.
The NLIHC report is a significant and distressing report on the state of economic security in America.
References in the report include discussion of the best and worst locations for low-income housing
supply. http://nlihc.org/oor
New Data: Calculating the Living Wage for U.S.
States, Counties and Metro Areas
Written by Carey Nadeau, OpenDataNation Inc. on 08/19/2016
Checked for accuracy on 8/17/2016; Numerical values are consistent with living wage 2015
estimates published on 8/15/2016.
While the minimum wage sets an earnings threshold under which our society is not willing to let
families slip, it fails to approximate the basic expenses of families in 2015. Consequently, many
working adults must seek public assistance and/or hold multiple jobs in order to afford to feed,
clothe, house, and provide medical care for themselves and their families.
Establishing a living wage, an approximate income needed to meet a family’s basic needs, would
enable the working poor to achieve financial independence while maintaining housing and food
security. When coupled with lowered expenses, for childcare and housing in particular, the living
wage might also free up resources for savings, investment, and/or for the purchase of capital assets
(e.g. provisions for retirement or home purchases) that build wealth and ensure long-term financial
security.
An analysis of the living wage, compiling geographically specific expenditure data for food, childcare,
health care, housing, transportation, and other basic necessities, finds that:
The living wage in the United States is $15.12 per hour in 2015, before taxes for a family of four
(two working adults, two children).
The minimum wage does not provide a living wage for most American families. A typical family
of four (two working adults, two children) needs to work nearly four full-time minimum-wage jobs (a
76-hour work week per working adult) to earn a living wage. Single-parent families need to work
almost twice as hard as families with two working adults to earn the living wage. A single-mother
with two children earning the federal minimum wage of $7.25 per hour needs to work 139 hours per
week, more hours than there are in a 5-day week, to earn a living wage.
Across all family sizes, the living wage exceeds the poverty threshold, often used to identify
need. State minimum wages provide for only a portion of the living wage. For two adult, two children
families, the minimum wage covers 64.3% of the living wage at best in South Dakota and 40.5% at
worst in Hawaii. This means that families earning between the poverty threshold ($24,440 for two
working adults, two children on average in 2015) and the living wage ($62,882 on average for two
working adults, two children per year before taxes), may fall short of the income and assistance they
require to meet their basic needs.
Figure 1: State Average Living Wage Before Taxes, with Poverty Threshold and Minimum
Wage Comparisons by Family Composition.
The cost of childcare and housing for families with children exceeds all other expenses. On
average, in each state, the typical family of four (two working adults, two children) spends 20.8% of
their after-tax income on housing and another 20.5% on childcare. Faced with tradeoffs, a second
working adult must earn at least $11,041 on average in order to cover the costs of childcare and
other increased expenses when they enter the workforce.
Figure 2. Living Wage Expenditures for a Family of Four (Two Adults and Two Children) After
Taxes.

The living wage varies based on the cost of living and taxes where families live. Families of
four (with two working adults, two children) in the North ($66,552) and West ($65,493) have higher
average living wages before taxes than the Midwest ($60,517) and South ($60,613). Within region,
the largest variation is between Southern states, where the living wage ranges from $53,242 in
Tennessee to $85,740 in the District of Columbia.
Figure 3: Range of State Incomes by Region, (Boxplot measures from the 25th to 75th %ile
and displays median).
In most metropolitan areas, where the US economy and jobs are increasingly concentrated,
the living wage is higher than the national median. Consistent with overall regional variation, of
the most populous 100 metropolitan areas, New York ($78,903), Honolulu ($81,454), and
Washington DC ($84,503) have the highest living wages for the typical family of four, before taxes.
Figure 4: Metropolitan Areas with the Highest and Lowest Living Wages for a Family of Four
(2 working adults, 2 children), before taxes.
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