SCRANTON — How much do you need to earn to have a “living wage” in Luzerne and Lackawanna counties? A new report pegs the minimum, for a single parent with one child, at $42,588 a year. The bigger the family, the more money you need.
Which means if you’re earning minimum wage, you pretty much need three jobs, Institute for Public Policy and Economic Development Executive Director Teri Ooms said during the unveiling of the “Living Wage Report 2016” at the University of Scranton Thursday. The report was done jointly by the institute and the university.
While most residents in the counties make more than minimum, it’s still not enough.
“The majority of jobs in the area are higher than minimum wage, but are still below a livable wage,” Ooms said.
For example, retail sales persons— the occupation providing the most jobs in Lackawanna County — earn an average of $11.68 per hour, while the top job in Luzerne County, laborers and movers, pays an average of $13.33. Both are comfortably above the federal minimum wage of $7.25 and hour, but still well below the report’s living wage of $20.48 per hour.
The report defines “living wage” as able to afford modest housing and food, while covering necessary costs including transportation, childcare, taxes and medical care. It does not include money for things like television, entertainment or internet service.
Of the $42,588 for a single parent, the biggest chunk is housing, at $8,328 per year, just under 20 percent. Ooms noted the general recommendation is to spend no more than 30 percent of income on housing, but the report points out that’s all but impossible on minimum wage and difficult even at the wages many receive here.
The report uses the “Fair Market Rent” (FMR), determined by the U.S. Department of Housing and Urban Development, to calculate the local “housing wage,” hourly pay needed to afford a two-bedroom apartment at FMR while spending no more than 30 percent of household income.
The national average housing wage is $19.35. Because housing is generally cheaper here, the housing wage is $14.73 per hour. Among the 10 occupations with the highest number of employees in the two counties — five occupations per county — none have an hourly wage that hits that rate.
Other costs that make up the living wage for a single parent with one child calculated in the report: $7,312 for child care, $6,855 for transportation, $5,850 for medical expenses, $5,422 for taxes, $5,176 for food, and $3,644 for “other.”
Ooms stressed several times she was not advocating for a sharp increase in the minimum wage, but also said some sort of increase has to be part of the solution.
“When it comes to increasing the minimum wage, it can be polarizing to hold the discussion,” she said, “but the discussion must be held.”
Making sure safety net programs are funded and are reaching those in need is another option for closing the gap between what people are earning and a living wage, Ooms said.
The report points out that, according to U.S. Census data, 13.6 percent of persons in Lackawanna County live below the federal poverty line and 15.6 percent do in Luzerne County. Ooms also noted that 20 percent of children under 18 in the two counties live in poverty.
But the numbers show even those who live well above the poverty levels are still below the living wage level. For a family of two adults and three children, the poverty level is below $30,000 annually. According to the report, “40 percent of households in Lackawanna and Luzerne counties have an annual income under $35,000,” above poverty level but well short of $42,588, which, being for a single parent with one child, is “the lowest annual living wage income by family composition.”
Improving education levels can make a substantial change in wages and in unemployment: In the two counties, the unemployment rate for those who never got a high school diploma is 9 percent, compared to six percent for those with that diploma, and 3.5 percent for those who have a bachelor’s degree or higher.
Policy makers “have to understand that there is a gap,” Ooms said, “and it’s not as clear cut as looking at those below the poverty line.”