“This new report just shows what I already know – I can’t pay for rent, food and child care on $7.40 an hour,” said Aunyetta Crosby, 25, who went on strike at a Detroit McDonald’s along with hundreds of other fast food workers across Metro Detroit on May 10. “McDonald’s makes billions off of our work, but I can’t even buy my daughter new shoes. We need to be making $15 an hour to get by. This report shows that’s really not asking a lot, and these companies can certainly afford it.”
In the study, Elise Gould, EPI director of health policy research, and EPI Research Assistants Natalie Sabadish, Hilary Wething, and Nicholas Finio explain that because poverty thresholds, generally set at the national level, were created to measure serious economic deprivation and do not account for community-specific costs, the dollar amount necessary for a family to attain a secure yet modest living is much higher than conventional estimates. Using EPI’s Family Budget Calculator, recently updated for 2013, the authors account for costs variations of housing, food, child care, transportation, health care, other necessities and taxes across the country and offer a broader, more comprehensive measure of economic welfare.
“Our family budget calculations show that the real costs for families to live modest, not even middle class, lives are much higher than conventional estimates show and virtually impossible for families living on minimum-wage jobs,” said Gould. “In fact, the actual amount of money a family needs to provide the most basic necessities exceeds the official poverty threshold, which stood at $23,283 for a two-parent, two-child family in 2012, for all six family types in all 615 family budget areas studied in this report.”
From New York City to St. Louis to Seattle, the report shows a full-time worker with a child would need to make at least $22.52, and as much as $32.28 an hour, to afford the basics. Regardless of the city, this new report shows $15 an hour is actually a modest demand from these workers, who don’t have enough money to pay for rent and food, let alone spend money at local businesses to get our economy moving again.
According to this report, to make ends meet, an adult with a child needs to make:
• $49,356, or $23.72 an hour if working full time, in Detroit.
• $67,153, or $32.28 an hour if working full time, in New York City.
• $48,840, or $23.48 an hour if working full time, in Chicago.
• $46,858, or $22.52 an hour if working full time, in St. Louis.
• $50,967, or $24.50 an hour if working full time, in Milwaukee.
• $52,611, or $25.29 an hour if working full time, in Seattle.
Even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs, the report shows. Annual wages for one full-time, full-year minimum-wage worker total $15,080, far below what is necessary for a one-parent, one-child family to live in even the least expensive family budget area.
The release of this report comes on the heels of the launch of the Congressional Progressive Caucus’ “Raise Up America” campaign, which aims to raise the minimum wage, support striking low-wage workers and encourage profitable companies to give their workers a living wage. It also follows a series of recent walkouts by federally-contracted workers in Washington, DC, strikes last month by Walmart workers, walkouts by fast-food workers in Seattle, Detroit, St. Louis and New York and combined fast-food and retail worker strikes in Chicago and Milwaukee.
“This report is further evidence that the wages are too damn low for too many workers across the country,” said Pastor Charles Williams II. “If profitable corporations paid workers enough, they’d have money in their pockets to spend and help the economy grow, instead of having to rely on public assistance to scrape by.”
Economists, elected leaders and others are increasingly citing evidence that stagnating wages and the proliferation of low-wage jobs are hampering the nation’s recovery:
In a recent speech, Federal Reserve Board Governor Sarah BloomRaskin suggested the types of jobs being created are slowing the recovery. “Those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery,” she said.
Alan B. Krueger, Chairman of the Council of Economic Advisers noted in a speech last month in Cleveland, that “The three-decades’ long stagnation in real income for the bottom half of families threatens our long cherished goal of equality of opportunity.”
The D15 campaign D15 is a coalition of fast food and retail workers, community organizations and faith leaders from across metro Detroit fighting to raise the minimum wage and the right to form a union without interference. For more information, visit detroit15.org.
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