Tag Archives: BEST

Congressional Candidate: I Couldn’t Live at American Entry-Level Wages

Ron Leach, a Democrat running for Congress in Kentucky, decided to see for himself what the working conditions are like for blue collar workers. He worked an entry-level job at UPS loading packages into aircrafts in Louisville, Kentucky for a couple of months and has recently written about his experience. You can find his full account here. To sum up, he says that without his wife’s benefits and salary:

I could not have survived the past couple months at the “entry level” of America’s economy in which an increasing majority find themselves trapped.

He describes working conditions common to many in the US. The job is physical and involves some risk, although he says that UPS tried to mitigate that risk where possible. However, the job only paid $8.50 per hour and workers weren’t eligible for employer-based benefits for a year. The 2013 BEST wage for Louisville, Kentucky for a single worker with benefits is $13.31 per hour. Without benefits, that worker needs to earn $14.98 per hour just to cover basic expenses. The lack of employer-based benefits leaves workers to find their own insurance. The wages paid barely keep workers off of Medicaid, assuming full time work. They will all be eligible for heavy subsidies under the Affordable Care Act. The need for health insurance is clear, as Leach notes several serious injuries among his coworkers, all new hires.

NELP estimates that more than one quarter of American workers make less than $10 per hour and EPI estimates that 28% of workers will be low-wage workers into the next decade.

We no longer have an economy that rewards hard work or playing by the rules.  We are increasingly becoming a nation of declining fortunes for the majority and a nation in which the American dream is increasingly beyond reach and social mobility is one direction – down – for a growing majority.  


Let’s Be Clear: A Universal Basic Income Does Not Ensure Basic Economic Security

Sparked by a proposed ballot referendum in Switzerland, the prospect of ensuring all Americans a basic income has been resurrected.

A universal basic income (UBI) is one of those rare policy ideas which has support on both sides of the aisle. Progressive, anti-poverty advocates are excited about ending extreme poverty,  increasing workers’ bargaining power and bolstering the safety net. And as Bruce Bartlett summarizes, the idea of a direct cash payment has earned support from more conservative and libertarian-minded critics of government bureaucracy and an extensive ‘welfare state’.

There’s still a sizable leap from opinion pages to the floor of Congress for policy ideas like this, of course. Even advocates acknowledge the proposal is unlikely to be adopted any time soon. But so far as these debates shape the political conversation about how to address low wages, poverty and inequality, it is important that its benefits and limitations be well-investigated and understood.

Proponents have argued that a universal basic income could “replace all other government benefit programs.” Whether this is possible depends on the value of the basic income. Generally, those who make this argument assume it would be somewhere between $5 and 10,000 a year, much lower than the value a family in poverty might gain from access to housing vouchers, SNAP, child care assistance, and Medicaid or CHIP. The value of these benefits would far exceed ten thousand dollars – as well they should! A basic income of $10,000 is far, far below what families need to be secure.

WOW has long advocated that eligibility and benefit levels for income support programs be determined using our Basic Economic Security Tables and Elder Economic Security Standard Index. Compared to the federal poverty levels on which eligibility for these programs is usually based, these Indexes are much more accurate measurements of families’ income needs. Comparing the BEST to local median wages demonstrates how poorly today’s wages and even standard public assistance cover the cost of basic expenses, such as rent, groceries and child care. A UBI can, however, be used to increase family economic security if it is added to the current array of support programs. Such an income can help families on the edges of poverty become more financially stable as they work towards economic security.

And this is not to mention the additional financial challenges faced by families with unique issues, including mental or physical illnesses and disabilities. The institution of a UBI should not take back housing assistance or health services that help families meet these challenges.

However burdened by bureaucratic inefficiencies, our patchwork of welfare programs still have the potential of delivering the level of support that families need to achieve basic economic security. A universal basic income offers some important benefits, but it should work with current programs, not be sold as a replacement for them.


Raising Jersey’s Minimum Wage—Good for Jersey Girls and Their Families

New Jersey native Bruce Springsteen is well-known for giving voice to the challenges facing working families as they struggle to for basic economic security in the Garden State.  Many are quite inspired by his stories of hardship, struggle and overcoming continue the fight for jobs and decent wages. This Friday night, the Raise the Wage Campaign will bring together advocates, researchers, community members, union members, elected leaders, minimum wage workers,  and others in Asbury Park—the Jersey Shore town that helped propel Springsteen to international stardom—to amplify these issues and highlight the need for a raise in the state’s minimum wage. 

Why does raising the minimum wage matter in Jersey?  Fans may remember hearing Springsteen sing that “down the shore, everything’s alright.”  Well sadly, the reality is that when we look at the economic security of working families everything is not alright, at the shore or anywhere in Jersey.  Many of New Jersey’s workers are struggling to get by on a minimum wage that is $7.25 an hour.  Working full time at the minimum wage, Jerseyans earn only  $14,500 annually – about $3,600 below the poverty line for a family of three—and nowhere near what the family needs to be economically secure.

However in a few weeks, New Jersey’s citizens have the opportunity to improve the lives of their neighbors and strengthen the state’s economy. A $1 increase in the state’s minimum wage is a ballot question on this November’s election.

Close to half a million New Jersey workers and over 230,000 children would benefit if the minimum wage rose to $8.25 per hour. Indexing the wage to inflation would maintain these benefits over time. And as for Springsteen’s “Jersey Girls”: women disproportionately comprise the workers who earn minimum wage. The Economic Policy Institute (EPI) estimates that more than half of the workers who would get a raise are women (55 percent) and more than half are people of color (55 percent).  As women increasingly become their families’ breadwinners, our economy’s success is dependent on women’s economic security and access to decent wages. An increase in the minimum wage will support not only these workers, but their children and families.

So what exactly does the increase in the minimum wage mean for workers in New Jersey?  It means an extra $173 in gross income each month.  This is a significant raise for workers struggling to just get by. In concrete terms this will allow a single worker in Asbury Park to cover over 90% of her utilities or cover over 60% of food costs each month.  Or she may decide to use that money to better cover her health care costs each month or save $81 a month toward emergency savings, and have another $92 dollars to put toward food. (See Figure 1).

Monthly expenses are taken from Wider Opportunities for Women’s Basic Economic Security Tables (BEST) Index for the New Jersey (2012), which presents the costs of the basic needs which allow a family economic security.

Monthly expenses are taken from Wider Opportunities for Women’s Basic Economic Security Tables (BEST) Index for the New Jersey (2012), which presents the costs of the basic needs which allow a family economic security.

And for the Jersey girl who is a single mother, raising the minimum wage would help her and her family cover almost 75% of their utilities or cover 63% of their health care expenses each month. Or that extra income can help her save $138 a month toward emergency savings and still have an additional $35 to put toward her basic household expenses such as clothing and telephone bills.(See Figure 2).

Monthly expenses are taken from Wider Opportunities for Women’s Basic Economic Security Tables (BEST) Index for the New Jersey (2012), which presents the costs of the basic needs which allow a family economic security.

Monthly expenses are taken from Wider Opportunities for Women’s Basic Economic Security Tables (BEST) Index for the New Jersey (2012), which presents the costs of the basic needs which allow a family economic security.

A raise in the minimum wage will also benefit Jersey’s businesses and overall economy.  As the above figures suggest, workers will likely spend much of any raise in local businesses on immediate and pressing needs like food, rent, gas, and other basics. According to New Jersey Policy Perspective this increased consumer spending would add $174.8 million to the state’s economy in 2014. This increased economic activity would result in the creation of the equivalent of 1,520 full-time jobs.

Raising the minimum wage in New Jersey is a critical step for Jersey girls and Jersey guys to move toward economic security.  WOW is happy to be participating in the Raise the Wage Campaign event in Asbury Park on Friday, and do our part to ensure all New Jerseyans are aware of the ballot initiative to increase the state minimum wage and improve the lives of working families down the shore and throughout the state.

And if you are in the Asbury Park area on Friday October 25th at 5pm come out to support the event! To find out more about the Asbury Park event visit the Raise the Wage event page





Laboring on Labor Day

Many American workers won’t attend family picnics or enjoy one of the last beach days of summer. They won’t stroll the mall to look for big holiday sales, or take in a much deserved day of relaxation and recovery. No, on Labor Day, millions of workers will staff the restaurants, stores, hotels and bars that the rest of us will visit. They’ll be serving us our food, ringing up those sale items and caring for our elderly parents. We give ourselves Labor Day off to celebrate the value and achievements of American workers, yet our lowest paid workers with the least labor protections can’t take it off.

Consider those working in one of the country’s fastest growing industries. Workers staffing America’s restaurants – the bartenders mixing your drinks and the waitresses serving you your food – are typically earning a minimum wage of $2.13 an hour.  Thanks to successful lobbying by the restaurant industry, this sub-minimum wage hasn’t been raised for over 20 years. Before tips, a waitress working full time would earn an annual salary of $4,499.  Tips are absolutely critical for these workers to make ends meet, and very often, they fall far short. According to calculations conducted by Wider Opportunities for Women and its cost of living measure, the Basic Economic Security Tables™, 72 percent of adult servers in the restaurant industry have total household incomes below what they need to care for their families. Of those workers, 80 percent were women, 51 percent were headed by single women, and 27 percent were headed by single moms.  Of course, restaurants employ many other low wage workers besides servers. Cooks, dishwashers, bussers and barbacks will be working this holiday, struggling to make ends meet on minimum wage salaries. Just check out the Restaurant Opportunity Center United’s video to see “how ethically you are eating” this holiday weekend.

The benefits and flexibility offered by these jobs are often just as bad as the wages. Forty million workers do not have access to any paid sick days at all. More than three in four food service and hotel workers (78%) do not have access to even one paid sick day, and other groups of low wage workers such as home health care workers and retail employees also overwhelmingly lack paid sick time.

And many low-wage workers in the retail and restaurant industry, have little to no schedule control, meaning they may be asked to leave work earlier than expected, losing out on those hours’ earnings or they may have to stay later at work without any advance notice.  These “just-in-time” management practices have placed the costs of inconsistent customer demand on the shoulders of the workers in the lowest paid jobs. When both the number of hours and the timing of those hours can change day-to-day, week-to-week, and season-to-season at the discretion of management, workers cannot be sure of a consistent schedule and may not be given much advanced notice of their schedules. This makes it very difficult for workers to schedule life appointments. Arranging child care and transportation can be near impossible.

Many workers are saying enough is enough.  Just last week, fast food and retail workers in almost 60 American cities walked off the job in a nationwide strike to call for a $15/hour minimum wage and protest the employers’ retaliation against unionization efforts.  Last Thanksgiving, almost 400,000 workers and supporters signed a petition to call on Target stores to not open on the holiday, so that the workers could have some time off with their families.

In protesting the low wages and nonexistent benefits of these jobs, these courageous workers are today’s strongest defenders of the American dream. These restaurant, retail and service jobs represent an increasing share of our job market, and the fight to improve their quality represent nothing short than the fight to rebuild the middle class. Americans recognize that a strong middle class and thriving economy are not built on low-wage work. Indeed, three-quarters of all Americans support an increase in the minimum wage to $10/hour and ensuring all workers have access to at least seven earned sick days per year.

On this Labor Day, honor those who are working today and struggling in some of our economy’s worst jobs. And show solidarity with those workers fighting for their own economic security and on behalf of all those who labor. Almost 100 years ago Mother Jones—a woman labor leader and activist for workers—commanded us to “Pray for the dead, but fight like hell for the living.”  And today it is up to us to continue to do both.


Fast food workers on strike in New York City (Photo Credit: Reuters/Andrew Kelly)

Fast food workers on strike in New York City
(Photo Credit: Reuters/Andrew Kelly)


Car Ownership is Too Expensive


Owning a private vehicle in the United States is a necessity for most Americans but it can also be a heavy financial burden. The 2013 US BEST puts the national average cost for owning a small sedan at $516 per month for a single worker. As Figure 1 above shows, transportation makes up over 1/5 of a single person’s BEST budget and is the second largest expense after housing.

In the face of this expense, more Americans are choosing not to drive. A recent study by the Michigan University Transportation Research Institute found that over 15% of Americans 18-39 haven’t bothered to get a driver’s license. The 2nd most frequently cited reason for avoiding a license was the price of owning and maintaining a car.

Despite these findings, driving a car is a necessity in most of the United States. As Figure 2 shows, approximately 86% of commuters in the US drive or carpool to get to work. Public transit is largely confined to large metropolitan areas and most communities have not yet invested in any infrastructure to support biking to work. This leaves workers stuck with a large mandatory expense as the US continues to work its way out of the Great Recession.

Check out the budgets for Washington, DC or Boston to see the impact readily available public transit can have on monthly transportation expenses.



Paycheck Fairness Supports Women’s Economic Security

The Senate is scheduled to vote on the Paycheck Fairness Act today. The Census Bureau estimates that women make approximately 77 cents for every dollar earned by men, creating a marked difference in economic security between men and women.

The figure above shows the percentage of men and women who live above and WOW’s BEST Index. More information on the methodology can be found in the Living Below the Line Report. While it is discouraging to see the different in economic security between men and women, it is not surprising. The figure below, however, demonstrates the difference in economic security in one occupation. Retail sales is a common vocation for both men and women- in the top five employers of both genders. Looking at the gap in economic security in just one occupation eliminates the influence occupational segregation has on women’s overall economic security. As shown, 54% of men who work as a retail salesperson attain economic security, but only 21% of women do. The gap is apparent even looking at simple wage data, the median weekly wage for full-time retail salesperson in 2011 was $620 for men and $466 for women: giving men 25% more every week.

The Paycheck Fairness Act will give women vital tools against wage discrimination, including the simple, commonsense measure of allowing workers to talk about and compare salaries. Call your senator to support Paycheck Fairness.


Can’t Afford to Work?

A recent CNN Money article, Moms: ‘I can’t afford to work, introduces the reader to a suburban Maryland mother who states that the high cost of employment—commuting, clothing, childcare—make working infeasible. Her decision to give up her career raises questions: When does it actually become too expensive for a spouse or partner to work? When do expenses such as childcare and transportation become greater than a second after-tax income? It turns out that for the typical two-worker American household, having as few as two children can tip the scales.

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Unequal Pay and Women’s Economic Security

Today marks Equal Pay Day—“the date symbolizes how far into 2012 women must work to earn what men earned in 2011.” The wage gap women experience during their working-age years, in addition to occupational segregation and time out of the labor force caring for children and other family members, all contribute to women’s reduced lifetime earnings and diminished capacity for savings. Unequal pay is inextricably connected to the higher rates of economic security women experience across their working-age years and into retirement.

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Will Growing Occupations Offer Economic Security?

The figure above compares some of the nation’s faster growing occupations which do not require 4-year college degrees to selected US BEST incomes (for workers with employment-based benefits) by family type. Through 2020, openings due to growth will be greatest among registered nurses, retail sales persons, home health aides and customer service representations. Such occupations represent the diversity of wages the country will see in coming years if anticipated economic development trends are realized. Nationwide, registered nurses earned an average of $32.56 per hour in 2010; retail sales persons earned just over a third of that, $12.02 per hour on average. Home health aides earned an average of $10.46 per hour.

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Child Care Costs Threaten Economic Security

The high cost of quality child care is the greatest threat to many families’ security, and in many places across the country, the cost of child care threatens a second parent’s ability to work and increase family income. The National Association of Child Care Resource and Referral Agencies (NACCRRA) documents this problem in their annual report, Parents and the High Cost of Child Care. Their research found that the average cost of center-based care for an infant exceeded the average cost of tuition and fees at a public four-year college.

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