Should I benefit from low wages earned by food, health, and services workers? Should my haircutter earn a living wage?
MIT has developed a living wage calculator that shows what a working family would need to earn to the “income needed to meet a family’s basic needs. [This] 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.” While a minimum wage provides a floor for hourly wages, a working family earning minimum wage will often fall below the poverty guidelines and will thus need to use public assistance to meet basic needs. This can be true even with the recent increases in the minimum wage. Click here to go to the MIT caculator.
When I got my hair cut a couple of days ago, a young woman in her twenties with two children aged 5 and 2 was the hair cutter. During our conversation about raising children and Christmas presents, she never mentioned a husband. Assuming that she was a single parent working 40 hours a week, the MIT calculator indicated that she would need to make $28 per hour or $58,000 annually before taxes. I have no idea what she makes but surely not $58,000 annually. The MIT information indicates that the average personal services worker makes $11 per hour or just under $23,000 annually, substantially less than half of what would be required for a living wage.
In the first half of the 20th century, my paternal grandfather supported a family of five children and a spouse on his wages as a barber. It was not an affluent life and it had its financial challenges, but he was earning a living wage. That is no longer possible. As uncomfortable as it makes me to realize it, I benefit from this lack of a living wage. My haircut with a senior discount was $10 with a $2 tip. This same situation exists with health and food workers, agricultural workers, building attendants. The low wages of these occupations does not provide a living wage for these workers and I benefit from lower costs.
I know it is simplistic to think that if I paid more, these workers would necessarily earn more. But if I do not somehow pay more, they will never be able to earn a living wage and thus find it difficult if not impossible to escape from the financial poverty of their lives. The problem is not that people do not want to work or even that they don’t have jobs but that for too many of our fellow citizens the jobs they have simply do not provide a living wage.